The U.S. Department of Transportation today announced that it will expand eligibility and provide more flexibility for a pilot program to expedite long-term, low-cost loans for America’s short line and regional railroads. The Railroad Rehabilitation and Improvement Financing Express (RRIF Express) is aimed at reducing the time and costs associated with securing loans to modernize aging freight and commuter rail infrastructure. In addition to expedited handling of loan requests, the new program could provide loans of up to $150 million for qualified borrowers.
“Expanding this financing program will strengthen the short line and regional railroad system, promote economic growth in rural communities, and boost America’s economic competitiveness,” said U.S. Transportation Secretary Elaine L. Chao.
Expanded eligibility includes:
- Increasing loan amounts from $50 million to $150 million;
- More types of projects are now eligible;
- Increasing option to finance loan amount from 40 percent to 75 percent; and
- Increased flexibility in considering different categories of environmental review.
The notice also raises Credit Risk Premium assistance from the previous five percent up to 10 percent of loan value, capped at $5 million per application.
“The RRIF Express program, originally introduced in December 2019, was a well thought-out attempt to improve the traditional RRIF program, and it has generated substantial interest throughout the country. Since that time, the RRIF Express program was modified and improved, once in March 2020, and again now. In my opinion, the modifications being introduced in this iteration combine to form a robust and significant improvement to the RRIF Express program,” noted Chuck Baker, President of the American Short Line and Regional Railroad Association (ASLRRA).
The Department’s Build America Bureau (the Bureau) will administer this program to support economic activity and improve the safety, capacity, and reliability of this crucial freight transportation sector. Short line and regional railroads operate more than 47,000 route miles in the U.S. As the first and last mile of freight rail service, short lines transport the goods and materials that consumers and businesses rely on every day.
For qualified applicants, the RRIF Express program will significantly cut credit risk premium costs and advisor fees, costs that borrowers would otherwise have to pay in the traditional RRIF program. The RRIF Express program will help in expediting loan requests from short line and regional railroads.
Letters of Interest will be accepted until all available financing is exhausted. The Notice of Funding Opportunity can be found on the Bureau’s website. Additional information, including webinars and other guidance, can be found on this site as it becomes available. The Bureau and ASLRRA are coordinating closely to provide educational training and technical assistance to help any parties interested in applying for a loan under the RRIF Express program.
The Bureau was established as a “one-stop shop” to streamline credit opportunities while also providing technical assistance and encouraging innovative best practices in project planning, financing, delivery, and operation. During Secretary Chao’s tenure at Department, the Bureau has closed over $1.1 billion in RRIF loans, supporting more than $1.6 billion in infrastructure investment across the country.
Under Secretary Chao’s leadership, the Department has sought to address the unique challenges rural communities face in upgrading their infrastructure. Last year, Secretary Chao announced the ROUTES Initiative to address disparities in rural transportation infrastructure investment.
Additionally, the Department launched the Transportation Infrastructure Finance and Innovation Act (TIFIA) Rural Project Initiative (RPI) to assist rural communities in overcoming financial barriers that slow infrastructure investment in rural America.