Federal Ship Financing Program (Title XI)
The Federal Ship Financing Program (commonly referred to as "Title XI" based on the part of the Merchant Marine Act of 1936 that established the program) provides long-term loans by the Maritime Administration (MARAD) to promote the growth and modernization of the U.S. Merchant Marine and U.S. shipyards. Through these loans, the Title XI Program encourages U.S. shipowners to obtain new vessels and recondition existing vessels with U.S. shipyards cost effectively. It also assists U.S. shipyards with modernizing, their facilities for building and repairing vessels. The repayment term allowed under the program generally is much longer with a higher funding level and lower interest rates than those available from the commercial lending market.
Since 2019, the Title XI Program has undergone several significant changes to align it with modern vessel financing and federal credit best practices. Federal Financing Bank (FFB) is now the “preferred lender” for all Title XI loans. MARAD monitors and services the loans, third-party trustees and financial institutions are no longer part of the program.
Summary of Program Benefits
- Repayment term for the lesser of up to 25 years or useful life of the asset;
- Below market interest rates (based on U.S. Treasury rates) fixed for the amortization period; and
- Up to 87.5 percent financing, subject to demonstration of sufficient project financial strength and minimum cash flow requirements.
Vessels of National Interest
MARAD is authorized by 46 USC 53703(d) to prioritize processing the applications for certain vessels that have been determined to be of importance for the support of US shipyards and the US Merchant Marine. As of June 21, 2022, and after consultation with other Bureau of Ocean Energy Management, MARAD designates the following as Vessels of National Interest:
Vessels that are constructed or reconstructed to be used for use primarily in:
Applications for Vessels of National Interest have priority for review and funding over applications for all other vessels except those considered suitable for service as a naval auxiliary vessel.
The above designation list is subject to review and update every four years and from time to time on an as-needed basis.
For additional information on whether a project would qualify or questions about processing applications with the Title XI program, please contact email@example.com or 202.366.5737.
- Service; and/or
- Maintenance of offshore wind facilities.