Uncle Sam Fixes Rusty Ship Loan Rules in Maritime Makeover
Published Date: 8/28/2026
Rule
Summary
This interim final rule revises MARAD regulations implementing the Vessel and Shipyard Financing Program (Title XI Program or the Program) financial and programmatic requirements. Specifically, MARAD implements statutory changes, updates the vessel project and shipyard project financing requirements imposed on Title XI Program borrowers, aligns the Title XI Program with modern Federal credit best practices, corrects numerous legal citations, improves accessibility by modernizing text, and removes obsolete references. This rule also streamlines the MARAD Title XI regulations by removing 14 of 34 sections of the existing regulations.
Analyzed Economic Effects
7 provisions identified: 3 benefits, 4 costs, 0 mixed.
Application fee cut from $5,000 to $1,000
If you apply for a Title XI loan guarantee, the application fee is reduced from $5,000 to $1,000 starting with this rule effective August 28, 2026. This lowers the upfront money you must pay to enter the program.
Investigation fee replaced by commitment fee
The rule replaces the former "investigation fee" with a restructured "commitment fee" and aligns the guarantee fee calculation with the credit subsidy fee. MARAD says this will eliminate unnecessarily high initial costs for larger projects and credit expert fees can be credited against the commitment fee.
No more financing for eligible export vessels
MARAD removed regulatory text and will no longer perform financing of eligible export vessels, per the rule changes implementing the National Defense Authorization Act for FY 2020.
Audited GAAP financial statements required
MARAD will require audited financial statements prepared under GAAP for any Borrower as part of Title XI financing applications. You must provide audited statements when seeking a loan guarantee.
Loan term limits for different project types
The rule sets maximum maturities: up to 25 years for new single-vessel financing or shipyard projects, up to 25 years for reconstructed vessels (or earlier if Useful Life ends), and up to 5 years for repaired vessels (or earlier if Useful Life ends). These limits apply to Notes guaranteed by MARAD.
Interest rate floor tied to Treasury plus risk premium
MARAD states the interest rate for each financing will be not less than a rate determined by the Secretary of the Treasury considering the current average yield on comparable Treasury obligations plus any MARAD-assessed risk premium; MARAD will also consider private market rates when judging reasonableness.
Priority processing for certain vessels
MARAD will prioritize processing applications for vessels suitable for service as U.S. naval or military auxiliaries and for vessels designated as "Vessels of National Interest," potentially giving faster review or expedited approval.
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