Funding our Future

Financing and Funding infrastructure renewal

While estimates vary widely, virtually all assessments of the need for comprehensive American infrastructure renewal suggest that the level of investments over the next ten years begins at a floor of one or two trillion dollars and can be as much as many times higher than that floor. Most observers acknowledge the need for funding from both public and private sources.

Given the high cost of infrastructure construction projects and the long useful lives of infrastructure facilities, the initial build and significant repair or upgrade projects often must be financed with long-term debt, and in some cases through equity investments in the private sector, while the significant on-going operations and maintenance costs are generally viewed as more effectively paid for through current sources of funding. In other cases, infrastructure project sponsors may choose a pay as you go approach to funding initial capital costs where a significant pool of funds are then currently available or the capital project can be effectively constructed over a timeframe that matches the expected sources of revenue.

Such ongoing revenue can be derived from the operations of the infrastructure facility (such as tolls, charges and other used-based fee), or from separate sources of income that are pledged to payment of the facility and its associated operating/maintenance costs, or from public tax dollars in the case of public projects or corporate revenues in the case or private facilities.

In the public sector, the federal government and state and local governments each play critical funding roles. Outlined below are key resources for understanding the role of each and for accessing information on how to work with government on infrastructure finance matters:

Key Federal Infrastructure Partners

The federal government role in infrastructure funding takes the form of providing direct funding of infrastructure projects or supporting private sector or state and local government projects through grants, loans or guarantees. Significant federal programs are outlined below:


Airport Improvement Program (AIP):

AIP Grants“… grants to strengthen our country’s airport infrastructure” (read about AIP’s most recent grants)

Build America Bureau:

About the Bureau“… responsible for driving transportation infrastructure development projects in the United States” (read about the Bureau)

Public-Private Partnerships (P3)“… allow for greater private participation in the delivery of projects” (read about the Bureau’s P3 activities)

Transportation Infrastructure Finance and Innovation Act (TIFIA)“… credit assistance for qualified projects of regional and national significance” (read about TIFIA)

TIFIA Rural Project Initiative (RPI)“… helping improve transportation infrastructure in America’s rural communities” (read about support for rural needs)

Railroad Rehabilitation & Improvement Financing (RRIF)“… direct loans and loan guarantees … to finance development of railroad infrastructure” (read about rail transportation funding)

Infrastructure For Rebuilding America (INFRA)“… funding for projects that address critical issues facing our nation’s highways and bridges” (read about INFRA grants)

Federal Highway Administration (FHWA):

About the FHWA“… stewardship over the construction, maintenance and preservation of the Nation’s highways, bridges and tunnels” (read about FHWA)

FHWA FAST Act Funding“… long-term funding certainty for surface transportation infrastructure planning and investment” (read about FHWA funding)

Center for Innovative Finance Support“… provides information and expertise in the use of different P3 approaches, and assistance in using tools including the SEP-15 program, private activity bonds (PABs), and the TIFIA Federal credit program to facilitate P3 projects” (read about the center)

US Major Transportation Projects“… database to compare performance with respect to delivery methods, financing methods, states, periods, and other factors” (view the data and analysis)

Federal Transit Administration (FTA):

About the FTA“… provides financial and technical assistance to local public transit systems, including buses, subways, light rail, commuter rail, trolleys and ferries” (read about the FTA)

FTA General Grant Programs“The Fixing America’s Surface Transportation (FAST) Act … supports transit funding …” (read about FAST Act funding)

FTA Capital Investment Grants Program“… funds transit capital investments, including heavy rail, commuter rail, light rail, streetcars, and bus rapid transit” (read about the grant process)

Funding & Finance Resources“… encourages partnerships between transit agencies and developers to generate commercial and residential opportunities near transit” (read about available resources)

Private Sector Participation“… numerous opportunities where the private sector can engage in the public transportation industry, ranging from private operators participating in the planning and transportation improvement program process to a public-private partnership, in which a private firm participates in the design, building, finance, operation, and maintenance aspects of a transit facility” (read about private sector transit opportunities)

Transit-Oriented Development (TOD)“… Pilot Program for TOD Planning helps support FTA’s mission of improving public transportation for America’s communities by providing funding to local communities to integrate land use and transportation planning with a new fixed guideway or core capacity transit capital investment” (read about TOD planning support)

Maritime Administration (MARAD):

StrongPorts Program“… goal of America’s Strong-Ports Program to support efforts to improve infrastructure in ports throughout the United States and to ensure they are capable of meeting our future freight transportation needs” (read about the program)

Grants and Finances“… a variety of grants, loans and funding streams designed to advance ship construction, repair and training at shipyards across the U.S., to develop and expand our nation’s port infrastructure and waterways, and to promote the growth and modernization of the U.S. maritime industry” (read about MARAD’s funding activities)

America’s Marine Highway System“… America’s Marine Highway System consists of our Nation’s navigable waterways including rivers, bays, channels, the Great Lakes, the Saint Lawrence Seaway System, coastal, and open-ocean routes” (read about waterways planning)


USDA Rural Development:

About USDA-RD“… offer loans, grants and loan guarantees to help create jobs and support economic development and essential services such as housing, health care, first responder services and equipment, and water, electric and communications infrastructure” (read about USDA-RA’s rural infrastructure programs)

Community Facilities Programs:

About Community Facilities Program’s Financial Support“… direct loans, loan guarantees and grants to develop or improve essential public services and facilities in communities across rural America” (read about community infrastructure support)

Energy-Related Programs:

Electric Programs“… capital to maintain, expand, upgrade, and modernize America’s vast rural electric infrastructure” (read about support for rural electric infrastructure)

Energy Programs“… renewable energy financing, with options including grants, guaranteed loans and payments” (read about rural renewable energy programs

Rural Utilities Service Water & Environmental Programs:

Utilities Financial Programs“… financing necessary to develop drinking water and waste disposal systems” (read about water and waste program support)

Telecommunications Programs:

Rural Broadband Infrastructure Initiatives“… investing in Rural Broadband to rebuild America’s infrastructure” (read about loan and grant assistance)

Housing Programs:

Multi-Family Housing Programs“… financing projects geared for low-income, elderly and disabled individuals and families as well as domestic farm laborers” (read about support for affordable rural housing)

Single Family Housing Programs“Low interest, fixed-rate Homeownership loans …” (read about financial support for rural home ownership)

Rural Community and Business Programs:

Community Economic Development Programs“… programs and services to people living in persistent poverty and in rural areas that have limited access to economic resources and job opportunities” (read about support for rural economic opportunities)

Business Programs“Loans, loan guarantees, and grants are available to individuals, businesses, cooperatives, farmers and ranchers, public bodies, non-profit corporations, Native American Tribes, and private companies in rural communities” (read about rural business development loans and grants)


Funding & Financing:

Energy Funding and Financing Programs“… supports a number of grant, loan and financing programs” (read about the Energy Department programs)

Loan Programs Office“… helps innovative energy, tribal energy, and advanced auto manufacturing projects overcome hurdles in obtaining loans to help bring new technologies to commercial deployment” (read about available energy infrastructure resources)

Tribal Programs:

Tribal Energy Loan Guarantee Program (TELGP)“… guarantee … loans to support economic opportunities to tribes through energy development projects and activities” (read about loan guarantee opportunities)

Office of Indian Energy Policy and Programs“… assist American Indian Tribes and Alaska Native villages with energy development, capacity building, energy cost reduction, and electrification of Indian lands and homes” (read about financial and technical support)

Clean Energy:

Innovative Clean Energy Projects Loan Program (Title XVII)“… loan guarantees to accelerate the deployment of innovative clean energy technology” (read about clean energy project loans)

Solar Energy Technologies Office (SETO)“… funding opportunities encourage collaborative partnerships among industry, universities, national laboratories, federal, state, and local governments and non-government agencies and advocacy groups” (read about solar energy funding opportunities)

State Energy Program (SEP):

State Energy Efficiency Funding Opportunities“… funding and technical assistance to states, territories, and the District of Columbia to enhance energy security, advance state-led energy initiatives, and maximize the benefits of decreasing energy waste” (read about federal-state partnerships to enhance energy efficiency)


General Financing Resources:

Water Finance Clearinghouse“… portal to help communities locate information and resources that will assist them in making informed decisions for their drinking water, wastewater, and stormwater infrastructure needs” (explore the portal)

Water Infrastructure and Resiliency Finance Center“… financing information to help local decision makers make informed decisions for drinking water, wastewater, and stormwater infrastructure to protect human health and the environment” (read about financing practices)

Financing Alternatives Comparison Tool“… financial analysis tool that helps municipalities, utilities, and environmental organizations identify the most cost-effective method to fund a wastewater or drinking water management project” (use the comparison tool)

State Revolving Funds:

Clean Water State Revolving Fund (CWSRF)“… federal-state partnership that provides communities a permanent, independent source of low-cost financing for a wide range of water quality infrastructure projects” (read about the CWSRF)

Drinking Water State Revolving Fund (DWSRF)“… federal-state partnership to help ensure safe drinking water …, provides financial support to water systems and to state safe water programs” (read about the DWSRF)

State Revolving Funds: Financing Drought Resilient Water Infrastructure Projects“… highlights innovative funding policies and programmatic actions that states are using to support drought resilient investment and operations through incentives, state requirements, and technical assistance” (read the report)


EPA Brownfields Program“… provides grants and technical assistance to communities, states, tribes and others to assess, safely clean up and sustainably reuse contaminated properties” (read about the program)

Brownfields Grant Funding“… funding for brownfields assessment, cleanup, revolving loans, environmental job training, technical assistance, training, and research” (read about available grants)

Land Revitalization Program“… technical assistance to communities facing the challenge of identifying and implementing reuse alternatives for formerly contaminated properties” (read about available technical assistance)

Leveraging Resources for Brownfields Revitalization“… assist communities in overcoming the challenges of making sound investment decisions to attract additional resources for community revitalization” (read about assistance with leveraging resources)

Brownfield Revitalization in Climate-Vulnerable Areas“… guidance for communities … to inform their efforts to balance planning goals, increase climate resiliency, and promote economic development” (read the report)


Community Development Financial Institutions (CDFI) Fund:

About the CDFI Fund“Empowering America’s economically distressed communities” (read about CDFI)

CDFI Fund Programs“… promoting economic revitalization and community development through investment in and assistance to Community Development Financial Institutions” (read about CDFI programs)

CDFI Capital Magnet Fund“… grants to finance affordable housing solutions and community revitalization efforts that benefit low-income people and communities nationwide” (read about affordable housing grants)

CDFI Bond Guarantee Program“… empowers CDFIs to execute large-scale projects, including the development of commercial real estate, housing units, charter schools, daycare or healthcare centers, and municipal infrastructure” (read about guarantee program for CDFIs)

New Markets Tax Credit (NMTC):

New Markets Tax Credit Program“… incentivizes community development and economic growth through the use of tax credits that attract private investment to distressed communities” (read about NMTC program)

NMTC Program Fact Sheet“… helps economically distressed communities attract private capital by providing investors with a Federal tax credit” (read the fact sheet)

Native American CDFI Assistance (NACA):

Native American CDFI Assistance Program“… creates jobs, builds businesses, and fosters economic self-determination in Native Communities nationwide” (read about NACA resources)

NACA Program Fact Sheet“… help Native Communities to grow by increasing their access to credit, capital, and financial services” (read the fact sheet)


Affordable Housing:

HUD Affordable Housing Development and Preservation Programs“Affordable housing development increases housing options for low-income individuals and families who struggle to secure acceptable housing in their communities. HUD’s preservation and recapitalization efforts ensure the long-term physical and financial viability of affordable rental housing.” (read about HUD housing initiatives)

Public Housing:

Public and Indian Housing (PIH) Capital Fund“… provides funds, annually, to Public Housing Agencies (PHAs) for the development, financing, and modernization of public housing developments and for management improvements” (read about PIH capital improvements programs)

Capital Fund Financing Program (CFFP)“… PHA may borrow private capital to make improvements and pledge, subject to the availability of appropriations, a portion of its future year annual Capital Funds to make debt service payments for either a bond or conventional bank loan transaction” (read about CFFP opportunities)

Federal Housing Administration (FHA) Housing Programs:

About the Federal Housing Administration“… largest mortgage insurer in the world …” (read about FHA)

FHA Multifamily Housing Programs“… provides mortgage insurance to approved lenders to facilitate the construction, rehabilitation, repair, refinancing, and purchase of multifamily rental housing projects” (read about the FHA multifamily program)

FHA Single Family Housing Programs“… supports affordable homeownership and refinancing opportunities for qualified borrowers through its Single Family mortgage insurance programs” (read about the FHA single family program)

Community and Economic Development:

HUD Community and Economic Development Programs“… create thriving communities by promoting integrated approaches through an ongoing process of identifying and addressing needs, assets, and priority investments” (read about HUD community and economic development initiatives)

Community Development Block Grant (CDBG) Programs“… annual grants on a formula basis to states, cities, and counties to develop viable urban communities by providing decent housing and a suitable living environment, and by expanding economic opportunities, principally for low- and moderate-income persons” (read about the CDBG programs)

State CDBG Program“… give each State the opportunity to administer CDBG funds for … cities with populations of less than 50,000 … and counties with populations of less than 200,000” (read about State discretionary CDBG allocation to small local governments)

Section 108 Loan Guarantee Program“… source of financing for economic development, housing rehabilitation, public facilities, and other physical development projects, including improvements to increase their resilience against natural disasters” (read about Section 108 CDBG loan guarantees)

Native American Housing and Development:

Office of Native American Programs (ONAP)“… administers housing and community development programs that benefit American Indian and Alaska Native tribal governments, tribal members, the Department of Hawaiian Home Lands, Native Hawaiians, and other Native American organizations” (read about ONAP activities)

Indian Housing Block Grant (IHBG) Program“… formula grant that provides a range of affordable housing activities on Indian reservations and Indian areas (read about IHBG grants)

Indian Community Development Block Grant (ICDBG) Program“… direct grants for use in developing viable Indian and Alaska Native Communities, including decent housing, a suitable living environment, and economic opportunities, primarily for low and moderate income persons (read about ICDBG grants)

FHA Healthcare Programs:

FHA Office of Healthcare Programs (OHP)“… provide mortgage insurance to residential care facilities and hospitals …” (read about OHP activities)


Health Resources & Services Administration (HRSA):

About HRSA Programs“… primary federal agency for improving health care to people who are geographically isolated, economically or medically vulnerable” (read about HRSA)

HRSA Funding Opportunities“HRSA fulfills its mission through grants and cooperative agreements” (read about HRSA funding opportunities)

HRSA Health Center Facility Loan Guarantee Program“… loans to eligible Health Center Program awardees for the construction/expansion, alteration/renovation and modernization of health center medical facilities” (read about HRSA’s loan guarantee program)

HRSA Rural Hospital Programs“… provides technical assistance and support to address the unique needs of rural hospitals …” (read about HRSA’s assistance to rural hospitals)

HRSA Rural Community Programs“… funding to increase access to care in rural communities and to address their unique health care challenges” (read about HRSA’s assistance to rural access to care)


Civil Works:

Civil Works Programs“… water resource development activities including flood risk management, navigation, recreation, and infrastructure and environmental stewardship” (read about the Army Corps’ civil works)

Civil Works Study and Project Partnerships“… conduct investigations related to its core mission areas of navigation, flood risk management, and ecosystem restoration, to determine if Congressional authorization and implementation of a specific Civil Works project are warranted” (read about partnering with the Army Corps)

Water Resources Projects:

Report to Congress on Future Water Resources Development“… identifies, for potential congressional authorization, completed feasibility reports, proposed feasibility studies, and proposed modifications to authorized projects or studies” (read about water resources project proposals)

Water Resources Project Delivery: Construction“… appropriations are sought through the annual Energy and Water Development appropriations acts” (read about water resources project authorization)


Universal Service for High Cost Areas – Connect America Fund (CAF)“… ensure that consumers in rural, insular, and high-cost areas have access to modern communications networks capable of providing voice and broadband service, both fixed and mobile, at rates that are reasonably comparable to those in urban areas” (read about CAF’s focus on broadband)

Rural Health Care Program“… the new Healthcare Connect Fund, provides funding to eligible health care providers (HCPs) for telecommunications and broadband services necessary for the provision of health care” (read about the Healthcare Connect Fund)

E-Rate – Schools & Libraries USF Program“… maximize options for schools and libraries seeking to purchase high-speed broadband …” (read about the school and library broadband initiative)

For potential additional federal financing sources:


CDFA Federal Financing Clearinghouse“… online resource cataloging the development finance programs offered by the federal government” (access funding resources – CDFA account required to access some information)

State and Local Government Infrastructure Finance

State and local governments traditionally finance infrastructure improvements through the issuance of debt, normally in the form of tax-exempt or other federally tax-advantaged municipal bonds, in some cases leveraging resources obtained through one or more of the federal programs described above and/or private sources described below. In addition, individual state governments may establish their own programs for providing financing support to smaller local governments within the state that can assist in leveraging those governments’ ability to raise the funds needed to pay for infrastructure needs with price tags that can overwhelm the financial health of these localities.

Tax-exempt municipal bonds can be issued for purely governmentally owned and operated public facilities, or for either governmentally owned or privately owned facilities that benefit private parties but which fall into certain Congressionally-recognized categories of facilities that carry public benefits and that qualify for tax-exempt financing under the Internal Revenue Code. The tax exemption permits infrastructure financing at significantly lower costs than would otherwise accrue if financed on a taxable basis. State and local governments may sometimes access the capital markets on a taxable basis if the financing results in more than a de minimis amount of private business use or other private benefit or debt support.


Tax-Exempt Bonds: A Description of State and Local Government Debt (February 15, 2018)“State and local governments may finance capital facilities with debt rather than out of current tax revenue to more closely align benefits and tax payments” (read the report)

Private Activity Bonds: An Introduction (July 13, 2018)“The federal tax code allows state and local governments to use tax-exempt bonds to finance certain projects that would be considered private activities” (read the report)


Paying for Local Infrastructure in a New Era of Federalism (May 23, 2016)“… presents a state-by-state analysis and comparison of the local tools to fund infrastructure, including local option taxes and fees, such as sales taxes, fuel taxes and motor vehicle fees, as well as emerging mechanisms like state infrastructure banks and public-private partnerships” (read the report)


Public Infrastructure Spending for State and Local Governments“… view historical national spending data for various types of public infrastructure projects” (view the data) (view underlying US Census Bureau data for most recent months)


State Financing Program Directory“… online resource cataloging the development finance programs offered by state governments” (access state program resources – CDFA account required to access some information)


Tax Exempt Bonds – Information for the Tax Exempt Bond Community“… administer federal tax laws applicable to tax-advantaged bonds” (access IRS resources on tax-exempt bonds)

Tax Exempt Bonds Phase I Training Materials for IRS Personnel“… an introduction to the federal taxation of governmental bonds, private activity bonds, and direct pay bonds” (read the training materials)

Tax Exempt Bonds Phase II Training Materials for IRS Personnel“… intermediate training of the federal taxation of governmental bonds, private activity bonds, and direct pay bonds …” (read the training materials)

Tax Exempt Bonds Phase III Training Materials for IRS Personnel“… advanced lessons on the federal taxation of governmental bonds” (read the training materials)


Tax-Exempt Municipal Bonds and Infrastructure: Over 100 Years of Building Together“If state and local governments lose the ability to use tax-exempt bonds and are compelled to issue taxable bonds as an alternative, it is estimated that debt issuance costs would increase around 25%, and possibly more for smaller governments” (read the issue brief)

Understanding Financing Options Used for Public Infrastructure“Unlike the federal government that issues bonds (Treasuries) to pay for operating expenses, state and local governments primarily issue bonds to pay for long term capital projects and longstanding infrastructure” (read the primer)

Debt 101 (Volume 1) – Issuing a Bond“Governmental entities have been using debt (most often in the form of municipal bonds) for over 200 years to fund public infrastructure such as government buildings, water distribution systems, schools, police stations and many other projects that require significant capital investment” (read the primer)

Debt 101 (Volume 2) – Responsibilities After Bond Issuance“Bonds issued by State and local governments are generally subject to ongoing monitoring and reporting with respect to federal disclosure requirements, as well as compliance with federal tax requirements” (read the primer)


Electronic Municipal Market Access (EMMA) System“The official source for municipal securities data and documents” (access public disclosures and data for municipal bonds)

Municipal Securities: Financing the Nation’s Infrastructure“Development and maintenance of the country’s infrastructure is primarily a function of state and local governments that issue municipal bonds” (read the paper)

Glossary of Municipal Securities Terms“… help investors and other market participants get a basic understanding of commonly used municipal market terminology” (look-up a municipal bond definition)


Public-Private Partnerships (P3), Private Equity and Other Private Sector Funding

Non-governmental private sector parties participate in the funding of many aspects of the American infrastructure. While certain aspects of this private sector participation are currently touched on throughout the AIRRC website, we provide some additional resources on private sector involvement in funding America’s infrastructure needs, and we expect to update this page in the near future to provide additional third-party resources directed toward private sector involvement and opportunities in infrastructure renewal. Check back soon.

Design-Build Institute of America

Unique Considerations for Social Infrastructure Public-Private Partnerships
“A social infrastructure P3 is an innovative and collaborative project delivery model for vertical infrastructure that accommodates the provision of social services – typically, public buildings such as schools, universities, hospitals, courthouses, prisons, and community housing” (read the primer)

Design-Build Public-Private Partnerships“… a project delivery model that involves an agreement between a public owner and a private sector partner for the design, construction, financing, and often long-term operations and maintenance of one or more infrastructure assets by the private sector partner over a specified term” (read the primer)

Environmental Defense Fund's EDF+Business

Unlocking Private Capital to Finance Sustainable Infrastructure“… introduces a framework to mobilize private finance for sustainable infrastructure projects” (read about sustainable infrastructure finance) (read the report)

Private Equity & Green Returns“… given its long term investment horizon and operational and financial expertise, the private equity industry is uniquely positioned to take advantage of opportunities to improve environmental management across the investment life cycle, from due diligence through portfolio company management and stewardship” (read more)

Governing Magazine

Guide to Financial Literacy Volume 3: Understanding the Risks & Rewards of Public-Private Partnerships“… P3s might change who pays for a project at first, but in the long run, taxpayers and those who use infrastructure always cover the bill. In other words, P3s are a financing tool, not a funding mechanism” (read the guide)

National Conference of State Legislatures (NCSL)

Building-Up: How States Utilize Public-Private Partnerships for Social & Vertical Infrastructure“P3s enable the private sector to engage not only private sector capital/debt to help government pay for the upfront planning, design and construction but also enables the private sector to hold the long-term operations and maintenance responsibilities” (read more)

Public-Private Partnerships for Transportation Categorization and Analysis of State Statutes“… categorizing and analyzing all transportation public-private partnership laws adopted by the 33 states, the District of Columbia and Puerto Rico that have enacted such legislation” (read the report)

PRI Association

Principles for Responsible Investment – Infrastructure“Long-term infrastructure investors should consider a broad range of ESG issues that potential and existing investments might face over the course of the assets’ life” (read more)

Primer on Responsible Investment in Infrastructure“… clarifies key concepts of responsible investment in private infrastructure equity and debt, and how the six Principles for Responsible Investment apply to infrastructure” (read the paper)

Reason Foundation

Federal Barriers to Private Capital Investment in U.S. Infrastructure“… the greatest federal obstacle is the inability in most cases to use tax-exempt revenue bonds for P3 projects” (read the policy brief)

Availability Payment or Revenue-Risk P3 Concessions? Pros and Cons for Highway Infrastructure“… explores the benefits that P3 concessions provide, and compares and contrasts availability payment (AP) concessions and revenue-risk (RR) concessions” (read the policy study)

Urban Institute

State and Local Governments and Impact Investing: A Guidebook for Strategic Engagement“For governments, impact investing can leverage significant private and philanthropic funds in the interest of social and environmental goals, access resources to stimulate growth and boost governance capacity, and help shift risks for innovative solutions” (read the research report)

Most recent substantive page revision: March 9, 2019