Bureau Bulletin Brief - USDOT Provides Guidance to Help Potential Borrowers Access Transit-Oriented Development Financing

Bulletin Brief - August 15, 2024

Bureau Provides Guidance to Help Potential Borrowers Access Transit-Oriented Development Financing to Increase Housing Supply

The White House recently issued a statement on opportunities to increase affordable housing supply and highlighted U.S. Department of Transportation (DOT) efforts. DOT’s Build America Bureau (Bureau) updated its guidance about financing transit-oriented development (TOD) projects, including office to residential conversions. The Bureau is currently reviewing dozens of letters of interest for projects for $10 billion in TOD loans.

Please watch a taped message from Bureau Executive Director Morteza Farajian. The TOD financing program guidance updates include:

• Projects such as office to residential conversions that remain within the same footprint could qualify for categorical exclusions for National Environmental Policy Act (NEPA) reviews, which saves considerable time and costs for applicants.

• Project sponsors can use a long-term, lower interest federal loan—a take-out loan—to repay interim construction financing from a commercial bank and finance the completed project. Projects seeking take out loans must comply with all program and federal requirements during construction. Please read the TOD frequently asked questions and answers. 

Additionally, the Bureau has facilitated Nationally Recognized Statistical Rating Organizations (NRSRO) development of processes, guidelines, and timelines to rate TOD projects, which have not traditionally been rated. Several NRSROs plan to hold webinars on their approach in early September. Check the Bureau’s TOD webpage for information.

The Bureau will hold a webinar on its underwriting process, typical terms and conditions, and important considerations for project sponsors on August 27 at 3 p.m. ET. The webinar is free, and registration is required. The Bureau strives to be inclusive and hold accessible events. Please contact BuildAmerica@dot.gov if you have any questions or to request accommodations. The Bureau will post the slides and a link to the taped webinar on the TOD website page: https://www.Transportation.gov/BuildAmerica/TOD

Multi-Faceted Approach to Innovation and TOD Support

Here are some briefs on other activities aligned with TOD efforts:

• DOT Bureau Executive Director Morteza Farajian appeared at a U.S. Senate Committee on Appropriations Subcommittee on Transportation, Housing, and Urban Development hearing, "Unlocking Department of Transportation Financing for More Transit-Oriented Housing Development", offering insights into statutory requirements, challenges potential TOD borrowers are encountering, and Bureau actions to mitigate them.
• The Bureau and Federal Transit Administration (FTA) hosted three webinars focused on the National Environmental Policy Act (NEPA) and TOD projects and federal environmental regulations. A recording is available on the Bureau website at https://www.transportation.gov/buildamerica/about/resources-mode/national-environmental-policy-act-nepa-tod-resources.
• Through the Regional Infrastructure Accelerator Program (RIA), several communities are pursing TOD projects, including Atlanta, Georgia; Cleveland, Ohio; Seattle, Washington; Suffolk, New York; and Tampa, Florida. The Bureau launched the RIA pilot program in 2021 and has funded 24 regional entities. The Bureau plans to issue the 2024 RIA notice of funding opportunity for $10 million this fall.
• Earlier this year, the Bureau received more than 50 applications, many focused on TOD projects, for Innovative Finance and Asset Concessions grants. The Bureau expects to announce selections soon. The Bureau partnered with the Brookings Institute in early May to highlight the new program. Watch the session here.

The Bureau team is collaborating with the Department of Housing and Urban Development (HUD) on adoption of best practices and potential streamlining for real estate development projects. The Bureau will continue to pursue process improvements for TOD projects as we work with the project sponsors and explore opportunities with new potential clients. For more information, email BureauTOD@dot.gov.

White House Office of Public Engagement Briefing August 16th

The White House Office of Public Engagement is hosting a virtual briefing on Friday, August 16 at 12 p.m. ET on recent actions announced by the Biden-Harris Administration to build more housing and lower housing costs. The call will feature senior White House and agency officials who will outline new steps to increase the supply of housing, including the announcements in the August 13th fact sheet. 

To join the call, please register at the below link:
https://pitc.zoomgov.com/webinar/register/WN_M17lpQY3Q6yv22Wi2BOShw
 
 
WHAT: Biden-Harris Administration Housing Supply Briefing featuring senior administration officials from The White House, the U.S. Department of Housing and Urban Development, the Advisory Council on Historic Preservation, and the U.S. Department of Transportation.

WHEN: Friday, August 16th at 12 p.m. ET 

WHERE: Zoom
 
Please note: This call is closed press and not for attribution.