Short lines endorse USDOT changes to RRIF loan program

The American Short Line and Regional Railroad Association (ASLRRA) has endorsed the U.S. Department of Transportation's (USDOT) recent changes to the federal Railroad Rehabilitation and Improvement Funding (RRIF) Express program, saying the reforms will make it easier for short lines to access government loans to help fund infrastructure upgrades.

Changes to the RRIF Express program — unveiled as RRIF Express 2.0 — include extending the filing time for applications; increasing the size of eligible loans to $150 million; expanding the scope of eligible projects to include nearly everything under the traditional program; increasing the option for a loan used for refinancing to up to 75 percent; and increasing the potential amount of Credit Risk Premium subsidy to a maximum of 10% of loan size.

"The modifications combine to form a robust and significant improvement to the program and should allow for more short-line projects to be presented and selected for funding," said ASLRRA President Chuck Baker in a press release. "These projects will in turn allow short lines to better serve their thousands of shippers and the largely rural and small town communities that they serve with safe, efficient, reliable and environmentally sustainable freight-rail service."

The association worked with the USDOT's Build America Bureau, the program's administrator, to improve the program's accessibility for small railroads. Launched in December 2019, RRIF Express reduced the time and cost of applying for funding.

RRIF Express already has generated "significant interest" among some ASLRRA members, association officials said.

For qualified applicants, RRIF Express reduces credit risk premium costs and adviser fees, costs that borrowers would otherwise pay in the traditional RRIF program, USDOT officials said. A notice of funding opportunity can be found on the department's website.