USDOT issues guidance for TOD projects seeking federal loans through Build America Bureau

May 24, 2021
While the FAST Act authorized TOD projects as eligible for the loans, a lack of guidance impeded use of Build America Bureau loans.

The U.S. Department of Transportation (USDOT) issued new guidance to clarify the eligibility of transit-oriented development (TOD) projects.

USDOT’s Build America Bureau (Bureau) developed the guidance for public and private entities seeking loans for TOD projects through the Transportation Infrastructure Finance & Innovation Act (TIFIA) and Railroad Rehabilitation & Improvement Financing (RRIF) programs.

TOD centers economic development around transit, rail and intercity bus facilities to create walkable residential and commercial centers. USDOT says community-focused investments like TOD are integral to the Biden-Harris Administration’s priorities, including connecting communities and reducing the climate impacts of transportation. The new guidance is intended to help project sponsors understand the parameters for TOD projects to qualify for financing under the TIFIA and RRIF loan programs.

“When people can move safely and easily by public transit, foot, bike, wheelchair or any other means, it can transform a community and improve the lives of those who call it home. Today’s announcement will help communities use transit-oriented development to save residents time and money, reduce pollution and carbon emissions, and make jobs accessible to more people,” said U.S. Transportation Secretary Pete Buttigieg.

“Integrating land use and transportation planning is central to USDOT’s efforts to meet the ambitious goals set by this administration. Making our credit programs accessible for TOD projects is a critical piece for our approach to tackling the climate crisis and promoting social equity through transportation,” said Principal Deputy Assistant Secretary for Transportation Policy Christopher Coes.

“Public-private partnerships play an important role in delivering infrastructure projects that support community development, and we look forward to working with local governments and their partners on TOD projects” said Morteza Farajian, executive director of the Build America Bureau.

Congress, under the FAST Act, determined that TIFIA and RRIF financing could support TOD projects, but USDOT had not established clear eligibility guidelines, which became a barrier to using these funds for that purpose. This new guidance opens the door to project sponsors interested in pursuing transit-oriented development in keeping with the Biden-Harris Administration's priorities.

This follows on USDOT’s actions in April, when the Federal Transit Administration announced the availability of $10 million in grants for TOD projects.

View the new transit-oriented development guidelines here: https://www.transportation.gov/buildamerica/about/resources-mode/transit-oriented-development