TIFIA Financing for Airports

What TIFIA Is

The Transportation Infrastructure Finance and Innovation Act (TIFIA) credit program, codified at 23 U.S.C. §§ 601–609, provides federal credit assistance—secured loans, loan guarantees, and standby lines of credit—for surface transportation projects. The program is administered by the U.S. Department of Transportation's Build America Bureau.

TIFIA loans carry a fixed interest rate equal to the U.S. Treasury rate for a comparable maturity on the date of loan execution. For projects in rural areas, borrowers pay half the Treasury rate. Borrowers may defer principal repayment for up to five years after substantial completion, and the maximum repayment term extends up to 35 years from that date. Interest does not accrue until loan proceeds are drawn, and there is no prepayment penalty.

BIL Expansion to Airports

Prior to 2021, airport projects were not eligible for TIFIA credit assistance. Section 11101 of the Bipartisan Infrastructure Law (Pub. L. 117-58), signed November 15, 2021, expanded TIFIA eligibility to include airport development projects. Under BIL, eligible airport projects include those that would be eligible for PFC funding under 49 U.S.C. § 40117(a) or for AIP funding, including:

• Terminal buildings and passenger facilities
• Airfield infrastructure (runways, taxiways, aprons)
• Airport entrance roads
• Land acquisition for airport development
• Aircraft rescue and firefighting (ARFF) facilities
• People mover / automated transit systems

The BIL airport TIFIA authority was time-limited. It applied to projects for which a letter of interest (LOI) was submitted on or before September 30, 2025.

How TIFIA Credit Assistance Works

Credit Subsidy and Federal Budget Mechanics

TIFIA is a federal credit program, not a grant program. The federal government does not give the borrower money—it lends at favorable terms. The federal budgetary cost is the "credit subsidy," which is the estimated long-term cost to the government of providing the loan (accounting for expected defaults, interest rate differentials, and other risk factors) as calculated under the Federal Credit Reform Act of 1990 (2 U.S.C. § 661 et seq.)

Because the credit subsidy cost per dollar lent is a fraction of the face value of the loan, TIFIA generates lending capacity at a ratio that has historically averaged approximately 40:1—meaning every $1 of budget authority supports approximately $40 in loan volume. The Bipartisan Infrastructure Law provided increased budget authority for TIFIA under the program's expansion, which translates to tens of billions in lending capacity across all TIFIA-eligible project types.

Maximum Loan Amount

Statutory law permits TIFIA loans up to 49% of reasonably anticipated eligible project costs (23 U.S.C. § 603(b)(2)).

From 2014 through July 2025, the Build America Bureau applied an internal policy cap limiting loans to 33% of eligible costs. On July 7, 2025, U.S. Transportation Secretary Sean P. Duffy removed this administrative policy cap, restoring the statutory maximum of 49%. The distinction between 33% and 49% is material for airport capital planning. On a $500 million terminal project, the difference between a 33% and 49% TIFIA loan is $80 million in additional low-cost federal credit:

Eligible Project Cost	TIFIA at 33%	TIFIA at 49%	Difference
$500 million	$165 million	$245 million	$80 million
$1 billion	$330 million	$490 million	$160 million
$2 billion	$660 million	$980 million	$320 million

Interest Rate Advantage

TIFIA loans are priced at the U.S. Treasury rate—the risk-free rate—which is below the yield on any airport revenue bond. The spread between the Treasury rate and an airport's bond yield varies by credit quality, market conditions, and lien position, but the borrowing cost differential is the primary financial benefit of TIFIA.

For projects qualifying as rural, the rate is half the Treasury rate. Sacramento County Department of Airports (SMF), which qualified as a rural borrower, projected savings exceeding $15 million over the life of its TIFIA loan compared to conventional financing for the same project (January 2025).

Subordination and Lien Position

TIFIA loans may be subordinate to the borrower's senior-lien obligations. This is a structural feature that makes TIFIA compatible with existing airport GARB indentures—the TIFIA loan can sit behind senior-lien revenue bonds in the flow of funds, meaning it does not trigger additional bonds test issues on the senior lien and does not require re-rating of existing senior bonds.

The Sacramento SMF Transaction: First Airport TIFIA Loan

The first TIFIA loan to an airport project closed on January 7, 2025, when the U.S. DOT executed a $36.1 million secured loan with the Sacramento County Department of Airports for the SMForward Skybridge project at Sacramento International Airport (SMF).

Feature	Detail
Borrower	Sacramento County Department of Airports
Project	Skybridge connecting Terminal B to Concourse B
Total project cost	$92.5 million
TIFIA loan amount	$36.1 million (39% of project cost)
Other funding sources	~$33 million FAA grants; ~$22 million airport revenues
Interest rate	Half the Treasury rate (rural designation)
Projected savings	Over $15 million vs. conventional financing
Airport enplanements (CY2024)	13.6 million passengers

The Skybridge project is part of SMF's $1.3 billion SMForward capital program. The transaction demonstrated that a mid-size airport could navigate the TIFIA application process and achieve financial close, establishing a precedent for other airports in the pipeline.

The Airport TIFIA Pipeline

As of the Build America Bureau's December 3, 2025 pipeline publication, approximately 37 airport projects had submitted letters of interest (LOIs) for TIFIA credit assistance. The pipeline spans projects from $5 million (Chehalis-Centralia Airport, WA) to $666 million (JFK New Terminal One Phase B1, NY).

Airport	State	TIFIA Loan Requested	Total Project Cost	Project Type	LOI Status
Sacramento Intl (SMF)	CA	$36.1M	$92.5M	Skybridge	Closed
McKinney National	TX	$30M	$60M	New terminal	Complete LOI
Monterey Regional	CA	$36M	$94M	Replacement terminal	Complete LOI
Dallas Love Field	TX	$457M (3 projects)	$1.03B	Terminal & infrastructure	Draft LOI
SEA-TAC Intl	WA	$454M	$2.3B	South Concourse	Draft LOI
JFK NTO (Phase B1)	NY	$666M	$1.7B	Terminal Phase B1	Draft LOI
Jackson-Medgar Wiley Evers	MS	$249M	$509M	Terminal	Draft LOI
Islip Long Island MacArthur	NY	$392M	$1.0B	Terminal/rail integration	Draft LOI
Bozeman Yellowstone	MT	$60M	$191M	Terminal	Draft LOI
Jackson Hole	WY	$35M	$98M	Terminal	Draft LOI
Bill & Hillary Clinton Natl	AR	$134M	$300M	Terminal	Draft LOI
Lansing Capital Region	MI	$114M	$276M	Terminal	Draft LOI
SkyCity (STT, USVI)	USVI	$351M	$1.3B	Terminal	Draft LOI

The pipeline demonstrates demand across all airport sizes: from small commercial service airports to large-hub facilities. Terminal construction and replacement accounts for the majority of airport applications.

The Expiration Problem

September 30, 2025 Deadline

BIL's expansion of TIFIA to airports required that an LOI be submitted on or before September 30, 2025. As of March 2026, no new airport LOIs can be submitted under the BIL authority. Projects that submitted LOIs before the deadline may continue through the credit review and closing process, but no additional airports can enter the pipeline absent new legislation.

H.R. 6168: Airport TIFIA Financing Certainty Act

On November 20, 2025, Representatives Will Hurd (R-CO) and John Garamendi (D-CA) introduced H.R. 6168, the Airport TIFIA Financing Certainty Act. The bill proposes to:

• Make airport TIFIA eligibility permanent (remove the September 30, 2025 sunset)
• Remove the investment-grade credit rating requirement for airport borrowers
• Raise the expedited review threshold from $75 million to $100 million
• Add transit-oriented development projects near airports as eligible uses
• Allow master credit agreements covering phased airport programs

ACI-NA issued a statement supporting the bill, noting that "$173.9 billion in airport infrastructure needs over the next five years" had been identified in ACI-NA's 2025 Airport Infrastructure Needs Study, and that "without Congressional action, airports will lose access to a financing tool" (November 20, 2025).

As of March 2026, H.R. 6168 has been introduced but not enacted. The bill's passage is a legislative question outside the scope of this article.

Where TIFIA Fits in an Airport Capital Stack

TIFIA does not replace other airport funding sources. It occupies a specific position in the capital stack:

Source	Role	Priority in Flow of Funds
Senior-lien GARBs	Primary bond financing	First claim on net revenues
Subordinate-lien GARBs	Additional bond capacity	Second claim
TIFIA loan	Low-cost subordinate debt	Below senior and subordinate bonds
PFC revenues	Dedicated federal-authorization revenue stream	Applied to eligible debt service or pay-go
AIG / AIP grants	Federal formula / discretionary grants	Reduces total project cost (no repayment)
ATP grants	Federal competitive terminal grants	Reduces total project cost (no repayment)
Airport cash / reserves	Equity contribution	No repayment obligation

The value proposition of TIFIA for an airport is the combination of (a) Treasury-rate interest, (b) subordination below existing bonds, (c) flexible repayment with a five-year deferral period, and (d) no prepayment penalty. These terms are not available from any private capital markets lender.

However, TIFIA carries costs that are not measured in basis points:

• Application and closing timeline. The TIFIA process involves an LOI, creditworthiness review, credit council approval, negotiation of a credit agreement, and financial close. From letter of interest (September 2024) to financial close (January 2025), the transaction completed in approximately four months.
• Federal compliance requirements. TIFIA borrowers are subject to federal requirements including Davis-Bacon prevailing wage, NEPA environmental review, and Title VI nondiscrimination, which may already apply to airports receiving AIP or PFC authorization but add compliance layers for privately financed components.
• Credit review. The Build America Bureau evaluates the borrower's creditworthiness, including the project's revenue projections, the airport's financial profile, and the ability to repay. Projects that do not meet the Bureau's credit standards will not receive a loan, regardless of statutory eligibility.

Analytical Considerations

Several analytical dimensions are relevant for airport finance teams evaluating TIFIA:

• Rural designation. Airports qualifying as rural under TIFIA's definition receive a rate equal to half the Treasury rate. Sacramento International (SMF), a commercial service airport outside the Sacramento metropolitan statistical area's core, qualified as rural and achieved $15 million in projected savings versus conventional financing—a 16.2% benefit on its $92.5 million project cost.
• 49% vs. 33% loan sizing. Following Secretary Duffy's July 2025 policy change, airports may now size TIFIA loans up to the statutory 49% of eligible costs. For capital programs where minimizing bond issuance is a priority, the higher TIFIA percentage directly reduces the par amount of bonds needed.
• Phased capital programs. H.R. 6168's proposed master credit agreement provision, if enacted, would allow airports with multi-phase capital programs to secure TIFIA terms for future phases without submitting separate applications for each phase. This mirrors how master trust indentures allow airports to issue multiple bond series under a single framework.
• Pipeline positioning. With the September 30, 2025 LOI deadline passed, the approximately 37 airport projects in the Build America Bureau pipeline as of December 2025 represent the current universe of potential airport TIFIA borrowers. Whether that pipeline expands depends on H.R. 6168 or successor legislation.