State Infrastructure Fund

The State Infrastructure Fund (SIF) is a is a low‑interest loan program that helps Tennessee local governments finance the construction of eligible transportation projects.

Created by the Tennessee General Assembly (T.C.A. 4-31-1201) and administered by the Tennessee Local Development Authority (TLDA) in coordination with the Tennessee Department of Transportation (TDOT), the SIF provides flexible financing for projects that improve mobility, safety, and quality of life in communities across the state.

Graphic, State Infrastructure Fund enables communities to, Enhance Mobility, Improve Safety and Stimulate Economic Growth.

Who Can Apply 

Eligible applicants include Tennessee government units, such as counties, cities, towns, metropolitan governments, and public agencies authorized to construct and operate transportation projects.

Eligible Projects

The SIF supports a wide range of transportationinfrastructure needs, including:

  • Streets, highways, bridges, tunnels, and roadway facilities
  • Intelligent transportation systems (ITS)
  • Airports and air transport facilities
  • Railways and rail facilities 
  • Port facilities 
  • Transit systems and capital improvements
  • Parking facilities
  • Pedestrian and bicycle facilities that enhance safety or mobility

If your project improves transportation, supports economic development, or enhances public welfare, it may qualify for SIF financing.

Key Program Features

  •  Low‑interest loans set at 50% of the market rate at the time TDOT recommends the project
  • Loan terms of 5, 10, 15, or 20 years, not exceeding the project’s useful life 
  • Prepayment allowed at any time without penalty
  • Ability to reduce the loan amount if project costs come in lower than expected
  • Up to 90% of loan funds can be disbursed prior to construction completion
  • Flexible security options, including project revenues, state‑shared taxes, or the full faith and credit of the borrower
  • TDOT project monitoring throughout construction to ensure compliance

Borrower Requirements

To qualify and remain in good standing, borrowers must:

  • Demonstrate financial ability to repay the loan
  • Submit an annual audit report to the Comptroller of the Treasury
  • Maintain a balanced and approved annual budget
  • Follow all closing documentation requirements, including adoption of a local resolution/ordinance approving the loan

These requirements help ensure the integrity and long‑term stability of the SIF program.

How to Apply

The SIF application process is straightforward:

  1. Submit a project application to TDOT for review.
  2. TDOT evaluates eligibility, project usefulness, and borrower financial capacity.
  3. If recommended, TLDA determines loan terms, interest rate, and required security.
  4. The borrower submits all required closing documents. 
  5. TLDA approves the loan, and project reimbursements may begin.

What types of transportation projects qualify?

Projects such as roadways, bridges, transit improvements, airports, rail facilities, ports, pedestrian and bicycle facilities, and ITS systems are all eligible under the SIF.

What interest rate will my project receive?

The SIF interest rate is set at 50% of the market rate at the time TDOT recommends the project to TLDA.

Can I prepay my SIF loan?

Yes. Borrowers may prepay all or part of the loan at any time with no penalty.

Are annual audits required?

Yes. All borrowers must file an annual audit report with the Comptroller’s Office as part of SIF loan compliance.

How are project costs reimbursed?

Loan funds are disbursed based on TDOT review and approval of eligible costs. Up to 90% of funds may be released before project completion.

Does TDOT monitor construction?

Yes. TDOT monitors each project to ensure it meets all requirements before the final loan disbursement is released.

When can we apply for SIF funding?

The State Infrastructure Fund does not operate on a traditional funding cycle. Applications may be submitted at any time, and TDOT reviews them on a rolling basis. Local governments are encouraged to apply whenever they have a qualified transportation project ready for consideration.

For questions about the SIF or the application process, please contact:

Email: TDOT.Project.Intake@tn.gov