Rail Freight Loan Program

The Rail Freight Loan Program is administered by the Illinois Department of Transportation (IDOT) and is designed to provide capital assistance to communities, railroads, and shippers in order to preserve and improve rail freight service across the state of Illinois. Rooted in the state's economic development strategy, the program aims to facilitate investments in rail infrastructure by connecting public and private entities and directing government funds toward high-impact projects that enhance statewide freight mobility. Though the program primarily offers low-interest loans, it may consider grants under exceptional circumstances. The core mission of the Rail Freight Loan Program is to support projects that enhance market access and reduce transportation costs through strategic rail investments. The program emphasizes leveraging state funds to attract private investments, thus creating long-term solutions to freight transportation challenges. Projects that contribute significantly to economic development—such as those fostering job creation or retention, reducing freight costs, or preserving essential rail lines—are prioritized for funding. Applicants must submit a written request on their official letterhead to initiate the application process. The request must include the applicant's name, a description of the proposed project, a location map or sketch, a schedule for the project, and an estimate of total cost along with the amount of funding requested from the Rail Freight Loan Program. The submission should also detail the expected benefits of the project, such as economic impacts and operational efficiencies. If available, an engineer’s cost estimate should be included as well. Eligibility is based on the potential of a project to deliver measurable economic benefits and to ensure long-term viability of rail service. While the program does not provide a comprehensive list of eligible applicant types, it is implied that railroads, shipping companies, and communities directly involved in freight operations are eligible. IDOT evaluates submissions based on their alignment with the state’s economic and transportation goals, including metrics like cost savings, employment outcomes, and service sustainability. After the initial letter is received by IDOT, applicants will be sent two additional forms to complete. These forms gather more detailed information about the applicant’s business, the scope of the proposed project, and its expected benefits. This two-stage application process ensures that IDOT can thoroughly evaluate each proposal's feasibility and alignment with state priorities before allocating funds. At the time of writing, the Rail Freight Loan Program is not accepting grant applications; only loan requests are considered. All communication regarding the program should be directed to the Bureau Chief of Freight Rail Management at IDOT’s office located at 69 W. Washington St., Suite 2100, Chicago, IL 60602. For general inquiries, applicants may also contact the main IDOT office at 2300 S. Dirksen Parkway, Springfield, IL 62764 by phone at (217) 782-7820 or via TTY at (866) 273-3681. Deadlines, specific funding amounts, and award timelines are not provided, so interested parties should reach out directly to IDOT for current availability and review timelines.

Ensure that your initial letter includes all required elements to avoid processing delays.