---
kind: "section"
citation: "23 U.S.C. § 603"
title: "23"
title_heading: "Highways"
number: "603"
heading: "Secured loans"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/23/603"
units:
  - "Chapter 6 — Infrastructure Finance"
---

# §603. Secured loans

- (a) **In General.—**
  - (1) **Agreements.—** Subject to paragraphs [(2)](#a-2) and [(3)](#a-3), the [Secretary](/usc/23/101.md?p=a-27) may enter into agreements with 1 or more obligors to make secured loans, the proceeds of which shall be used—
    - (A) to finance eligible [project](/usc/23/101.md?p=a-20) costs of any [project](/usc/23/101.md?p=a-20) selected under [section 602](/usc/23/602.md);
    - (B) to refinance interim [construction](/usc/23/101.md?p=a-4) financing of eligible [project](/usc/23/101.md?p=a-20) costs of any [project](/usc/23/101.md?p=a-20) selected under [section 602](/usc/23/602.md);
    - (C) to refinance existing Federal credit instruments for rural infrastructure [projects](/usc/23/101.md?p=a-20); or
    - (D) to refinance long-term [project](/usc/23/101.md?p=a-20) obligations or Federal credit instruments, if the refinancing provides additional funding capacity for the completion, enhancement, or expansion of any [project](/usc/23/101.md?p=a-20) that—
      - (i) is selected under [section 602](/usc/23/602.md); or
      - (ii) otherwise meets the requirements of section 602.
  - (2) **Limitation on refinancing of interim construction financing.—** A loan under [paragraph (1)](#a-1) shall not refinance interim [construction](/usc/23/101.md?p=a-4) financing under [paragraph (1)(B)](#a-1-B)—
    - (A) if the maturity of such interim [construction](/usc/23/101.md?p=a-4) financing is later than 1 year after the substantial completion of the [project](/usc/23/101.md?p=a-20); and
    - (B) later than 1 year after the date of substantial completion of the [project](/usc/23/101.md?p=a-20).
  - (3) **Risk assessment.—** Before entering into an agreement under this subsection, the [Secretary](/usc/23/101.md?p=a-27), in consultation with the Director of the Office of Management and Budget, shall determine an appropriate capital reserve subsidy amount for each secured loan, taking into account each rating letter provided by an agency under [section 602(b)(3)(B)](/usc/23/602.md?p=b-3-B).
- (b) **Terms and Limitations.—**
  - (1) **In general.—** A secured loan under this section with respect to a [project](/usc/23/101.md?p=a-20) shall be on such terms and conditions and contain such covenants, representations, warranties, and requirements (including requirements for audits) as the [Secretary](/usc/23/101.md?p=a-27) determines to be appropriate.
  - (2) **Maximum amount.—**
    - (A) **In general.—** Except as provided in [subparagraph (B)](#b-2-B), the amount of a secured loan under this section shall not exceed the lesser of 49 percent of the reasonably anticipated eligible [project](/usc/23/101.md?p=a-20) costs or if the secured loan does not receive an investment grade rating, the amount of the senior [project](/usc/23/101.md?p=a-20) obligations.
    - (B) **Rural projects fund.—** In the case of a [project](/usc/23/101.md?p=a-20) capitalizing a rural [projects](/usc/23/101.md?p=a-20) fund, the maximum amount of a secured loan made to a [State](/usc/23/101.md?p=a-28) infrastructure bank shall be determined in accordance with [section 602(a)(5)(B)(iii)](/usc/23/602.md?p=a-5-B-iii).
  - (3) **Payment.—** A secured loan under this section—
    - (A) shall—
      - (i) be payable, in whole or in part, from—
        - (I) tolls;
        - (II) user fees;
        - (III) payments owing to the obligor under a public-private partnership;
        - (IV) other dedicated revenue sources that also secure the senior [project](/usc/23/101.md?p=a-20) obligations; or
        - (V) in the case of a secured loan for a [project](/usc/23/101.md?p=a-20) capitalizing a rural [projects](/usc/23/101.md?p=a-20) fund, any other dedicated revenue sources available to a [State](/usc/23/101.md?p=a-28) infrastructure bank, including repayments from loans made by the bank for rural infrastructure [projects](/usc/23/101.md?p=a-20); and
      - (ii) include a rate covenant, coverage requirement, or similar security feature supporting the [project](/usc/23/101.md?p=a-20) obligations; and
    - (B) may have a lien on revenues described in [subparagraph (A)](#b-3-A), subject to any lien securing [project](/usc/23/101.md?p=a-20) obligations.
  - (4) **Interest rate.—**
    - (A) **In general.—** Except as provided in subparagraphs [(B)](#b-4-B) and [(C)](#b-4-C), the interest rate on a secured loan under this section shall be not less than the yield on United States Treasury securities of a similar maturity to the maturity of the secured loan on the date of execution of the loan agreement.
    - (B) **Rural infrastructure projects.—**
      - (i) **In general.—** The interest rate of a loan offered to a rural infrastructure [project](/usc/23/101.md?p=a-20) or a rural [projects](/usc/23/101.md?p=a-20) fund under the TIFIA program shall be at ½ of the Treasury Rate in effect on the date of execution of the loan agreement.
      - (ii) **Application.—** The rate described in [clause (i)](#b-4-B-i) shall only apply to any portion of a loan the subsidy cost of which is funded by amounts set aside for rural infrastructure [projects](/usc/23/101.md?p=a-20) and rural [project](/usc/23/101.md?p=a-20) funds under [section 608(a)(3)(A)](/usc/23/608.md?p=a-3-A).
    - (C) **Limited buydowns.—** The interest rate of a secured loan under this section may not be lowered by more than the lower of—
      - (i) 1½ percentage points (150 basis points); or
      - (ii) the amount of the increase in the interest rate.
  - (5) **Maturity date.—**
    - (A) **In general.—** Except as provided in subparagraphs [(B)](#b-5-B) and [(C)](#b-5-C), the final maturity date of the secured loan shall be the lesser of—
      - (i) 35 years after the date of substantial completion of the [project](/usc/23/101.md?p=a-20); and
      - (ii) if the useful life of the capital asset being financed is of a lesser period, the useful life of the asset.
    - (B) **Rural projects fund.—** In the case of a [project](/usc/23/101.md?p=a-20) capitalizing a rural [projects](/usc/23/101.md?p=a-20) fund, the final maturity date of the secured loan shall not exceed 35 years after the date on which the secured loan is obligated.
    - (C) **Long lived assets.—** In the case of a capital asset with an estimated life of more than 50 years, the final maturity date of the secured loan shall be the lesser of—
      - (i) 75 years after the date of substantial completion of the [project](/usc/23/101.md?p=a-20); or
      - (ii) 75 percent of the estimated useful life of the capital asset.
  - (6) **Nonsubordination.—**
    - (A) **In general.—** Except as provided in [subparagraph (B)](#b-6-B), the secured loan shall not be subordinated to the claims of any holder of [project](/usc/23/101.md?p=a-20) obligations in the event of bankruptcy, insolvency, or liquidation of the obligor.
    - (B) **Preexisting indenture.—**
      - (i) **In general.—** The [Secretary](/usc/23/101.md?p=a-27) shall waive the requirement under [subparagraph (A)](#b-6-A) for a public agency borrower that is financing ongoing capital programs and has outstanding senior bonds under a preexisting indenture, if—
        - (I) the secured loan is rated in the A category or higher;
        - (II) the secured loan is secured and payable from pledged revenues not affected by [project](/usc/23/101.md?p=a-20) performance, such as a tax-backed revenue pledge or a system-backed pledge of [project](/usc/23/101.md?p=a-20) revenues; and
        - (III) the TIFIA program share of eligible [project](/usc/23/101.md?p=a-20) costs is 33 percent or less.
      - (ii) **Limitation.—** If the [Secretary](/usc/23/101.md?p=a-27) waives the nonsubordination requirement under this subparagraph—
        - (I) the maximum credit subsidy to be paid by the Federal Government shall be not more than 10 percent of the principal amount of the secured loan; and
        - (II) the obligor shall be responsible for paying the remainder of the subsidy cost, if any.
  - (7) **Fees.—** The [Secretary](/usc/23/101.md?p=a-27) may establish fees at a level sufficient to cover all or a portion of the costs to the Federal Government of making a secured loan under this section.
  - (8) **Non-federal share.—** The proceeds of a secured loan under the TIFIA program may be used for any non-Federal share of [project](/usc/23/101.md?p=a-20) costs required under this title or [chapter 53](/usc/49/chstIII/ch53.md) of title 49, if the loan is repayable from non-Federal funds.
  - (9) **Maximum federal involvement.—**
    - (A) **In general.—** The total Federal assistance provided for a [project](/usc/23/101.md?p=a-20) receiving a loan under the TIFIA program shall not exceed 80 percent of the total [project](/usc/23/101.md?p=a-20) cost.
    - (B) **Rural projects fund.—** A [project](/usc/23/101.md?p=a-20) capitalizing a rural [projects](/usc/23/101.md?p=a-20) fund shall satisfy [subparagraph (A)](#b-9-A) through compliance with the Federal share requirement described in [section 610(e)(3)(B)](/usc/23/610.md?p=e-3-B).
- (c) **Repayment.—**
  - (1) **Schedule.—** The [Secretary](/usc/23/101.md?p=a-27) shall establish a repayment schedule for each secured loan under this section based on—
    - (A) the projected cash flow from [project](/usc/23/101.md?p=a-20) revenues and other repayment sources; and
    - (B) the useful life of the [project](/usc/23/101.md?p=a-20).
  - (2) **Commencement.—** Scheduled loan repayments of principal or interest on a secured loan under this section shall commence not later than 5 years after the date of substantial completion of the [project](/usc/23/101.md?p=a-20).
  - (3) **Deferred payments.—**
    - (A) **In general.—** If, at any time after the date of substantial completion of the [project](/usc/23/101.md?p=a-20), the [project](/usc/23/101.md?p=a-20) is unable to generate sufficient revenues to pay the scheduled loan repayments of principal and interest on the secured loan, the [Secretary](/usc/23/101.md?p=a-27) may, subject to [subparagraph (C)](#c-3-C), allow the obligor to add unpaid principal and interest to the outstanding balance of the secured loan.
    - (B) **Interest.—** Any payment deferred under [subparagraph (A)](#c-3-A) shall—
      - (i) continue to accrue interest in accordance with [subsection (b)(4)](#b-4) until fully repaid; and
      - (ii) be scheduled to be amortized over the remaining term of the loan.
    - (C) **Criteria.—**
      - (i) **In general.—** Any payment deferral under [subparagraph (A)](#c-3-A) shall be contingent on the [project](/usc/23/101.md?p=a-20) meeting criteria established by the [Secretary](/usc/23/101.md?p=a-27).
      - (ii) **Repayment standards.—** The criteria established pursuant to [clause (i)](#c-3-C-i) shall include standards for reasonable assurance of repayment.
  - (4) **Prepayment.—**
    - (A) **Use of excess revenues.—**
      - (i) **In general.—** Except as provided in [clause (ii)](#c-4-A-ii), any excess revenues that remain after satisfying scheduled debt service requirements on the [project](/usc/23/101.md?p=a-20) obligations and secured loan and all deposit requirements under the terms of any trust agreement, bond resolution, or similar agreement securing [project](/usc/23/101.md?p=a-20) obligations may be applied annually to prepay the secured loan without penalty.
      - (ii) **Certain applicants.—** In the case of a secured loan or other secured Federal credit instrument provided after the date of enactment of the Surface Transportation Reauthorization Act of 2021, if the obligor is a governmental entity, agency, or instrumentality, the obligor shall not be required to prepay the secured loan or other secured Federal credit instrument with any excess revenues described in [clause (i)](#c-4-A-i) if the obligor enters into an agreement to use those excess revenues only for purposes authorized under this title or title 49.
    - (B) **Use of proceeds of refinancing.—** The secured loan may be prepaid at any time without penalty from the proceeds of refinancing from non-Federal funding sources.
- (d) **Sale of Secured Loans.—**
  - (1) **In general.—** Subject to [paragraph (2)](#d-2), as soon as practicable after substantial completion of a [project](/usc/23/101.md?p=a-20) and after notifying the obligor, the [Secretary](/usc/23/101.md?p=a-27) may sell to another entity or reoffer into the capital markets a secured loan for the [project](/usc/23/101.md?p=a-20) if the [Secretary](/usc/23/101.md?p=a-27) determines that the sale or reoffering can be made on favorable terms.
  - (2) **Consent of obligor.—** In making a sale or reoffering under [paragraph (1)](#d-1), the [Secretary](/usc/23/101.md?p=a-27) may not change the original terms and conditions of the secured loan without the written consent of the obligor.
- (e) **Loan Guarantees.—**
  - (1) **In general.—** The [Secretary](/usc/23/101.md?p=a-27) may provide a loan guarantee to a lender in lieu of making a secured loan under this section if the [Secretary](/usc/23/101.md?p=a-27) determines that the budgetary cost of the loan guarantee is substantially the same as that of a secured loan.
  - (2) **Terms.—** The terms of a loan guarantee under [paragraph (1)](#e-1) shall be consistent with the terms required under this section for a secured loan, except that the rate on the guaranteed loan and any prepayment features shall be negotiated between the obligor and the lender, with the consent of the [Secretary](/usc/23/101.md?p=a-27).
- (f) **Streamlined Application Process.—**
  - (1) **In general.—** Not later than 180 days after the date of enactment of the FAST Act, the [Secretary](/usc/23/101.md?p=a-27) shall make available an expedited application process or processes available at the request of entities seeking secured loans under the TIFIA program that use a set or sets of conventional terms established pursuant to this section.
  - (2) **Terms.—** In establishing the streamlined application process required by this subsection, the [Secretary](/usc/23/101.md?p=a-27) may include terms commonly included in prior credit agreements and allow for an expedited application period, including—
    - (A) the secured loan is in an amount of not greater than $100,000,000;
    - (B) the secured loan is secured and payable from pledged revenues not affected by [project](/usc/23/101.md?p=a-20) performance, such as a tax-backed revenue pledge, tax increment financing, or a system-backed pledge of [project](/usc/23/101.md?p=a-20) revenues; and
    - (C) repayment of the loan commences not later than 5 years after disbursement.
  - (3) **Additional terms for expedited decisions.—**
    - (A) **In general.—** Not later than 120 days after the date of enactment of this paragraph, the [Secretary](/usc/23/101.md?p=a-27) shall implement an expedited decision timeline for public agency borrowers seeking secured loans that meet—
      - (i) the terms under [paragraph (2)](#f-2); and
      - (ii) the additional criteria described in [subparagraph (B)](#f-3-B).
    - (B) **Additional criteria.—** The additional criteria referred to in [subparagraph (A)(ii)](#f-3-A-ii) are the following:
      - (i) The secured loan is made on terms and conditions that substantially conform to the conventional terms and conditions established by the National Surface Transportation Innovative Finance Bureau.
      - (ii) The secured loan is rated in the A category or higher.
      - (iii) The TIFIA program share of eligible [project](/usc/23/101.md?p=a-20) costs is 33 percent or less.
      - (iv) The applicant demonstrates a reasonable expectation that the contracting process for the [project](/usc/23/101.md?p=a-20) can commence by not later than 90 days after the date on which a Federal credit instrument is obligated for the [project](/usc/23/101.md?p=a-20) under the TIFIA program.
      - (v) The [project](/usc/23/101.md?p=a-20) has received a categorical exclusion, a finding of no significant impact, or a record of decision under the National Environmental Policy Act of 1969 ([42 U.S.C. 4321](/usc/42/4321.md) et seq.).
    - (C) **Written notice.—** The [Secretary](/usc/23/101.md?p=a-27) shall provide to an applicant seeking a secured loan under the expedited decision process under this paragraph a written notice informing the applicant whether the [Secretary](/usc/23/101.md?p=a-27) has approved or disapproved the application by not later than 180 days after the date on which the [Secretary](/usc/23/101.md?p=a-27) submits to the applicant a letter indicating that the National Surface Transportation Innovative Finance Bureau has commenced the creditworthiness review of the [project](/usc/23/101.md?p=a-20).

## Source credit

(Added Pub. L. 105–178, title I, § 1503(a), June 9, 1998, 112 Stat. 245, § 183; renumbered § 603 and amended Pub. L. 109–59, title I, §§ 1601(d), 1602(b)(3), (5), (d), Aug. 10, 2005, 119 Stat. 1240, 1247; Pub. L. 112–141, div. A, title II, § 2002, July 6, 2012, 126 Stat. 614; Pub. L. 114–94, div. A, title II, § 2001(c), Dec. 4, 2015, 129 Stat. 1442; Pub. L. 117–58, div. A, title II, § 12001(e), (f), (h), Nov. 15, 2021, 135 Stat. 619.)

## Notes

### Editorial Notes

### References in Text

The date of enactment of the Surface Transportation Reauthorization Act of 2021 and the date of enactment of this paragraph, referred to in subsecs. (c)(4)(A)(ii) and (f)(3)(A), are the date of enactment of div. A of Pub. L. 117–58, which was approved Nov. 15, 2021.

The date of enactment of the FAST Act, referred to in subsec. (f)(1), is the date of enactment of Pub. L. 114–94, which was approved Dec. 4, 2015.

The National Environmental Policy Act of 1969, referred to in subsec. (f)(3)(B)(v), is Pub. L. 91–190, Jan. 1, 1970, 83 Stat. 852, which is classified generally to chapter 55 (§ 4321 et seq.) of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see Short Title note set out under section 4321 of Title 42 and Tables.

### Amendments

2021—Subsec. (b)(5)(A). Pub. L. 117–58, § 12001(e)(1), substituted “subparagraphs (B) and (C)” for “subparagraph (B)” in introductory provisions.

Subsec. (b)(5)(C). Pub. L. 117–58, § 12001(e)(2), added subpar. (C).

Subsec. (c)(4)(A). Pub. L. 117–58, § 12001(f), designated existing provisions as cl. (i), inserted heading, substituted “Except as provided in clause (ii), any excess” for “Any excess”, and added cl. (ii).

Subsec. (f)(3). Pub. L. 117–58, § 12001(h), added par. (3).

2015—Subsec. (a)(2). Pub. L. 114–94, § 2001(c)(1), added par. (2) and struck out former par. (2). Prior to amendment, text read as follows: “A loan under paragraph (1) shall not refinance interim construction financing under paragraph (1)(B) later than 1 year after the date of substantial completion of the project.”

Subsec. (b)(2). Pub. L. 114–94, § 2001(c)(2)(A), designated existing provisions as subpar. (A), inserted subpar. (A) heading, substituted “Except as provided in subparagraph (B), the amount of” for “The amount of”, and added subpar. (B).

Subsec. (b)(3)(A)(i)(V). Pub. L. 114–94, § 2001(c)(2)(B), added subcl. (V).

Subsec. (b)(4)(B)(i). Pub. L. 114–94, § 2001(c)(2)(C)(i), substituted “or a rural projects fund under the TIFIA program” for “under this chapter”.

Subsec. (b)(4)(B)(ii). Pub. L. 114–94, § 2001(c)(2)(C)(ii), inserted “and rural project funds” after “rural infrastructure projects”.

Subsec. (b)(5). Pub. L. 114–94, § 2001(c)(2)(D), designated existing provisions as subpar. (A) and inserted heading, substituted “Except as provided in subparagraph (B), the final” for “The final”, redesignated former subpars. (A) and (B) as cls. (i) and (ii), respectively, of subpar. (A), and added subpar. (B).

Subsec. (b)(8). Pub. L. 114–94, § 2001(c)(2)(E), substituted “the TIFIA program” for “this chapter”.

Subsec. (b)(9). Pub. L. 114–94, § 2001(c)(2)(F), designated existing provisions as subpar. (A) and inserted heading, substituted “The total Federal assistance provided for a project receiving a loan under the TIFIA program” for “The total Federal assistance provided on a project receiving a loan under this chapter”, and added subpar. (B).

Subsec. (f). Pub. L. 114–94, § 2001(c)(3), added subsec. (f).

2012—Pub. L. 112–141 amended section generally. Prior to amendment, section related to secured loans.

2005—Pub. L. 109–59, § 1602(d), renumbered section 183 of this title as this section.

Subsec. (a)(1). Pub. L. 109–59, § 1601(d)(1), in subpars. (A) and (B) inserted “of any project selected under section 602” after “costs”, added subpar. (C), and struck out concluding provisions which read as follows: “of any project selected under section 182.”

Subsec. (a)(3). Pub. L. 109–59, § 1602(b)(3), substituted “602(b)(2)(B)” for “182(b)(2)(B)”.

Subsec. (a)(4). Pub. L. 109–59, § 1601(d)(2), substituted “The execution” for “The funding” and struck out before period at end “, except that—

“(A) the Secretary may fund an amount of the secured loan not to exceed the capital reserve subsidy amount determined under paragraph (3) prior to the obligations receiving an investment-grade rating; and

“(B) the Secretary may fund the remaining portion of the secured loan only after the obligations have received an investment-grade rating by at least 1 rating agency”.

Subsec. (b)(2). Pub. L. 109–59, § 1601(d)(3)(A), inserted “the lesser of” before “33 percent” and “or, if the secured loan does not receive an investment grade rating, the amount of the senior project obligations” before period at end.

Subsec. (b)(3)(A)(i). Pub. L. 109–59, § 1601(d)(3)(B), inserted “that also secure the senior project obligations” after “sources”.

Subsec. (b)(4). Pub. L. 109–59, § 1601(d)(3)(C), struck out “marketable” before “United States Treasury securities”.

Subsec. (b)(8). Pub. L. 109–59, § 1602(b)(5), substituted “this chapter” for “this subchapter”.

Subsec. (c)(3) to (5). Pub. L. 109–59, § 1601(d)(4), redesignated pars. (4) and (5) as (3) and (4), respectively, in par. (3)(A), struck out “during the 10 years” after “at any time”, in par. (3)(B)(ii), substituted “loan” for “loan beginning not later than 10 years after the date of substantial completion of the project in accordance with paragraph (1)”, and struck out heading and text of former par. (3). Text read as follows: “The sources of funds for scheduled loan repayments under this section shall include tolls, user fees, or other dedicated revenue sources.”

### Statutory Notes and Related Subsidiaries

### Effective Date of 2021 Amendment

Amendment by Pub. L. 117–58 effective Oct. 1, 2021, see section 10003 of Pub. L. 117–58, set out as a note under section 101 of this title.

### Effective Date of 2015 Amendment

Amendment by Pub. L. 114–94 effective Oct. 1, 2015, see section 1003 of Pub. L. 114–94, set out as a note under section 5313 of Title 5, Government Organization and Employees.

### Effective Date of 2012 Amendment

Amendment by Pub. L. 112–141 effective Oct. 1, 2012, see section 3(a) of Pub. L. 112–141, set out as an Effective and Termination Dates of 2012 Amendment note under section 101 of this title.