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Statute Regulations and FAQs

Statutes and Regulations

The below links will take you to U.S. Code of Statute: 46 USC Chapter 537: LOANS AND GUARANTEES and U.S. Code of Federal Regulations (CFR): 46 CFR 298: OBLIGATION GUARANTEES.

Frequently Asked Questions

What types of projects does Title XI finance?

Title XI finances new U.S.-flagged vessel construction, reconstruction and reconditioning of existing U.S. flagged-vessels, and modernization of U.S. shipyard facilities.  Eligible vessels include almost any type of vessel operated as a commercial vessel and can be documented under U.S. law (e.g., cargo vessels, tugs or towboats, barges, drydocks, dredges, tankers, ferries, and offshore service vessels).  Title XI has financed a wide variety of projects in its long history.  If you have questions or are not sure of the eligibility, please contact the Office of Marine Financing at

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How early in the construction process should I contact MARAD to discuss a potential application?

There is no specific time. A major consideration is whether you are seeking construction and mortgage period financing or just mortgage period financing.  Processing time for an application varies greatly depending on the complexity of a proposed transaction and responsiveness of an applicant to MARAD’s questions during the due diligence and underwriting processes. 

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Is a pre-application meeting required prior to submitting an application?

While not required, it is highly recommended.  The pre-application meeting is used for a prospective applicant to present a high-level overview of the key application sections to facilitate a better understanding of the applicant and the project by MARAD and identify any initial questions or concerns regarding the application.  The goal of the meeting is to ensure the submitted application meets program eligibility requirements and contains adequate information for efficient processing.  If you would like to discuss scheduling a pre-application meeting, please contact the Office of Marine Financing at

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Is MARAD only considering applications for projects that qualify as Vessels of National Interest?

No, while Vessels of National Interest are viewed as a priority for processing applications, this designation does not exclude other types of vessels or projects from being considered if they are eligible for approval under the program requirements. 

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How long does it take to process a Title XI application?

After an application is determined to be complete, MARAD has up to 270 days to notify an applicant that it is approved or declined.  Applications are generally processed in order of receipt (with priority to Vessels of National Interest) but are not required to be approved in that same order. Processing times vary based on the complexity of the project, the transaction structure, and the responsiveness of the applicant during the MARAD review.

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What fees are required to process an application and are they eligible for financing (i.e., included in the requested loan amount)?

There are three statutory fees that MARAD is required to collect as part of the application review and funding process – Application Fee, Investigation Fee, and Guarantee Fee.  The Application Fee of $5,000 is due when the application is submitted to MARAD for review.  The Investigation Fee is due before MARAD may issue an application approval.  The Guarantee Fee is due upon execution of the loan documentation and before funding.  Only the Guarantee Fee may be financed as part of the project cost (if that option is selected by the applicant). 

If MARAD requires other fees as part of its review process, such as for independent financial advisor or legal counsel, those fees will be credited against the cost of the Investigation Fee. The requirements for calculating the Investigation Fee and Guarantee Fee are set forth in the Title XI regulations.  If you have specific questions about the program fee requirements, please contact the Office of Marine Financing at

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What is the maximum amount Title XI can finance for a project?

MARAD may approve financing for up to 87.5% of most of the capitalizable costs (what we call “Actual Cost”) for most vessel and all shipyard modernization projects.  Barges may qualify for financing of up to 75% of the Actual Cost.  However, funding amounts are determined after a full credit underwriting and due diligence by the agency.

MARAD may not approve a project for the full requested amount based on the project ability to service the debt and operating expenses and other risks of the underlying transaction, such as charter hire contract term compared to repayment period requested, loan structure and parties, financial and credit analysis (including financial projections and related scenarios/sensitivities).  If the funding amount is approved for lower than level requested, then additional equity would be required.

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How long of a term can Title XI finance a project?

MARAD may approve loans for up to the lesser of 25 years from the date of delivery of the vessel or completion of the shipyard modernization or the useful life of the asset. If more than one vessel is being financed, then the loan term may be based on the date of the last vessel delivered.

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What is the typical interest rate for a Title XI financing and is it fixed or floating for the term of the loan?

Interest rates are below market rates for typical maritime sector loans and based on U.S. Treasury securities rates. The interest rate for a project is set the day before funding.  Title XI financing is through the Federal Financing Bank, which is a U.S. Government corporation supervised by the Department of Treasury.  Almost all applicants select a fixed interest rate for the life of the loan, but an applicant may choose a floating rate with MARAD approval.

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Can a borrower prepay a Title XI loan before its maturity date?

Generally, Title XI loans include a prepayment penalty (i.e., a make-whole premium) that is determined at the time of prepayment based on interest rate of the loan and current U.S. Treasury securities rates.  For an additional interest rate cost, an applicant may elect at the time the loan is funded for the option to prepay the debt without penalty (i.e., at par).

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Is there a minimum or maximum loan size that Title XI will finance?

There is no minimum or maximum dollar amount required to apply for Title XI financing.  However, the funding amount available for your project may be limited by Congressional appropriations that govern the loan capacity for the program.

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I have previous experience with Title XI financing how is the program different now?

There have been substantial changes to the program since 2019 when significant changes to the authorizing statute where enacted.  These changes have improved the loan review process and eliminated certain loan costs, among other things.  For example, Title XI no longer requires an investment bank for debt placement or an indenture trustee for payment processing, instead, MARAD now uses the Federal Financing Bank for funding and services the Title XI loans itself.  Additionally, the program no longer uses static “one size fits all” financial tests for its financings.  Instead, as part of its underwriting process, MARAD will develop financial tests appropriate for the risk of the project and the credit profile of the applicant and any guarantor.  If you would like to learn more about changes to the program, please contact the Office of Marine Financing at

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Are there “Buy America” requirements for a financing requested under Title XI?

Title XI has a “domestic preference” requirement that is similar to the Buy America requirements you may be familiar with from other U.S. Government programs.  However, rather than affirmatively requiring recipients to meet a domestic content standard as a condition of a loan approval, MARAD excludes from the loan amount the costs of foreign components and services used in vessel construction unless MARAD grants a waiver for those costs.

MARAD may only include foreign components in the “Actual Cost” calculation of a project if they are not part of the vessel hull and superstructure and are not available domestically.  There is a domestic availability/Buy America approval process, which will require specific information to be submitted by the applicant and the shipyard for the application review.  Depending on the type of financing requested, at least 50% of the foreign components approved as includable in the Title XI financing will be required to be shipped on a U.S.-flagged vessel.

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