Application Notes:

Mandatory letters of interest (LOIs) are accepted on a rolling basis.

Prior to submitting an LOI, applicants are encouraged to contact the funding agency, using the information provided in the Contact section, for an initial consultation to ensure that the project meets program requirements and that initial risk assessments are completed.

LOIs must be emailed to the appropriate address provided in the Contact section.

LOIs must include:

• Summary information
• Applicant information
• Joint venture applicant information (if applicable)
• Project information
• Financial plan
• Creditworthiness
• General terms and certifications

LOIs will be evaluated according to the following criteria:

• Project eligibility
• Federal requirements
• Credit program-specific requirements:
  • Creditworthiness
  • Repayment source
• Extent to which the project satisfies the funding agency's policy goals

Submitted LOIs will undergo a preliminary review, and if determined by the funding agency as reasonably likely to satisfy all eligibility requirements, will move on to an in-depth creditworthiness review. Applicants that undergo a creditworthiness review will be required to pay the advisors' fees upfront payment of at least $250,000 upon request, and deliver an oral presentation to the funding agency.

Applicants that submit a successful LOI will be invited to submit a full application.

Refer to the NOFA, Guide, and LOI files for additional application information.

Match Notes:

There are no stated matching requirements for this program.

The funding agency may provide direct loans of up to 100 percent of the total project costs; however, the funding agency prefers applicants to provide equity to the project. This program does not have an appropriation of budget authority to cover the cost of credit assistance provided through this program; therefore, the cost to the government of providing financial assistance must be borne by the applicant or another nonfederal entity on behalf of the applicant through the payment of the credit risk premium (CRP). The funding agency will calculate the amount of the CRP that must be paid for each loan before it can be disbursed. Any collateral provided will be relevant to the calculation of the CRP.

Applicants must provide the following fees for this program:

• The advisors' fees upfront payment of at least $250,000, which is to be provided during the draft application review process upon request of the funding agency
• Any additional advisors' fees as described on page 63 of the Guide file
• An annual servicing fee of approximately $13,000, indexed to inflation, for each credit instrument approved for each project
• Project monitoring fees in cases where the funding agency incurs costs in connection with monitoring the performance of a project, enforcement of credit agreement provisions, amendments to the credit agreement and related documents, and other performance-related activities

The advisors' fees payment may be waived if sufficient funds are available from a set-aside from the FY 2016 Consolidated Appropriations Act. Refer to page 10 of the Guide file for details.

In addition to the CRP, each applicant must pay an investigation fee regardless of whether the loan is approved. The investigation fee defrays costs that the funding agency incurs in evaluating applications. The investigation fee will not exceed one half of 1 percent of the requested amount, but is often substantially less.

Funding Notes:

Up to $35 billion is expected to be available throughout the lifetime of this program to support direct loans and loan guarantees. At least $7 billion is reserved for projects benefiting freight railroads other than Class I carriers.

In addition to credit assistance, this program provides technical assistance to capital programs that consist of high-priority projects in the early stages of development and meet the requirements detailed on pages 53-54 of the Guide file.

Funds will be provided on a reimbursement basis.

Loans will be approved or denied within 90 days of the receipt of complete applications.

The maximum maturity of all forms of credit assistance provided through this program is 35 years after a project's substantial completion or the useful life of the project, whichever is less.

Repayment terms for loans may be for up to 35 years. Interest rates will be equal to the cost of borrowing to the government.

Loan repayments must commence no later than five years after the date of substantial completion of the project.

Funds may not be used for:

• Lobbying
• Refinancing outstanding debt incurred for other eligible projects
• Use of any funds or assets from railroad or intermodal operations for purposes not related to such operations if that use would impair the ability of the borrower or its partners to provide rail or intermodal services in an efficient and economic manner, or would adversely affect the ability of the borrower or its partners to perform their obligations under the credit instrument
• Discretionary dividend payments that unreasonably conflict with the borrower's ability to maintain its capital program, equipment, facilities, and operations
• Direct or indirect federal guarantees in combination with tax-exempt debt
• Railroad operating expenses