America’s Title XI Vessel and Shipyard Financing Program provides federal loan guarantees through the Maritime Administration (MARAD) to finance the building, reconstruction, or repair of commercial vessels (except for fishing vessels) in U.S. shipyards and to modernize U.S. shipyard facilities.
Effective August 28, 2026 through an Interim Final Rule issued the same day, MARAD implemented a comprehensive regulatory overhaul of the Vessel and Shipyard Financing Program that includes lowering certain fees, and prioritizing certain military projects.
Although the regulatory revisions are immediately effective, MARAD is still accepting public comments submitted on or before October 27, 2026.
- To submit a comment, click HERE.
More Background on the Title XI Vessel and Shipyard Financing Program
Established under the Merchant Marine Act of 1936, the Title XI Program provides for the full faith and credit guarantee of the United States, acting by and through the Maritime Administrator, for the payment of debt obligations to: (1) U.S. shipowners for the purpose of financing or refinancing U.S. flag vessels constructed, reconstructed, repaired, or reconditioned in U.S. shipyards; and (2) U.S. shipyards for the purpose of financing advanced shipbuilding technology and modern shipbuilding technology of a privately-owned shipyard facility located in the U.S.
Because the Title XI Program guarantees full payment of the obligation’s unpaid principal and interest in the event of a default by the borrower, both the statute and regulations contain several criteria and requirements intended to reduce the risk of a loan default.
This Interim Final Rule revises the Title XI regulations found at 46 CFR part 298. To assist owners and operators of United States flagged vessels and shipyard owners, MARAD is revising the entire regulation, which has remained substantially unchanged since 1978.
The rule modernizes the regulations and is intended to provide clarity to improve administrative efficiencies and result in net cost savings to the public and the Federal Government. A summary of the changes includes the following:
Revisions to correct numerous citations in accordance with the codification of the Act into 46 U.S.C. ch. 537, improve accessibility by modernizing text, remove obsolete references, improve processing times for projects, and provide a mechanism to prioritize applications for expedited application approval.
Updates to the Title XI Program regulations are intended to simplify application requirements and provide applicants and participants with a better understanding of MARAD expectations for program participation.
The Interim Final Rule eliminates 14 of the current rule’s 34 sections. Moreover, the current rule does not conform to modern credit standards or accurately reflect the current process for evaluating applications. At the time the Title XI Program regulations were first promulgated in 1978, Federal credit standards for agencies did not exist.
This Interim Final Rule incorporates modern Office of Management and Budget (OMB) credit program requirements that mitigate the U.S. Government’s risk associated with a credit default.
MARAD loan agreements provide for a variety of applicants and projects and include a number of component documents. Terms and conditions found in the regulations are being removed and instead provided for in MARAD’s published loan agreement documents. The application forms (MA-163 and MA-163A), and the borrower loan agreement documents are found on MARAD’s website at https://www.maritime.dot.gov/grants-finances/title-xi/title-xi-applications.
Fee reductions also have been made to encourage greater program participation. The current regulation has a $5,000 application fee. MARAD believes that a reduced application fee of $1,000 will lower barriers to entry for certain participants with limited resources for capital investment. In addition, changes in the rule include the restructuring of the former investigation fee (renamed the commitment fee), which will benefit applicants by eliminating unnecessarily high initial costs for larger projects.
Lastly, MARAD is removing text that is no longer supported by statutory authority. For example, MARAD no longer performs financing of eligible export vessels. Thus, the related regulatory text is being removed.
Immediate Effective Date and Request for Comment
MARAD has analyzed this rule under 5 U.S.C. 553(b)(B) and (d)(3) and determined that it has good cause to waive the prior opportunity for notice and comment and delayed effective date ordinarily prescribed by the Administrative Procedure Act (APA).
MARAD nonetheless seeks comment on this interim final rule and will consider comments received in issuing any final rule.
Under the APA, 5 U.S.C. 553(b)(B), an agency may waive the requirements for notice and public procedure when it finds, for good cause, that such procedures are “impracticable, unnecessary, or contrary to the public interest.” MARAD finds that the notice and comment process is unnecessary in this instance. The revisions do not impose new, substantive requirements on the public; rather, they codify existing administrative processes, statutory updates, and established Federal fiscal practices. The changes largely involve:
- Clarification and Modernization: Relocating existing information to provide a more logical and accessible guide for program applicants.
- Statutory Alignment: Updating the rule to reflect legislative changes.
- Fiscal Safeguards: Incorporating standard OMB credit program requirements, which are necessary to mitigate the risk of default and protect the U.S. Government’s interests. These standards represent universal best practices in Federal financing.
Because the rule merely conforms existing regulations to current statutory requirements and adopts standard Federal credit oversight practices, it does not represent a discretionary policy shift that would benefit from public input. These substantive policy choices, as the parameters of these updates, are driven by law and government-wide fiscal standards. Accordingly, MARAD finds that notice and comment are unnecessary and the application of the 5 U.S.C. 553(b)(B) “good cause” exception is warranted. For similar reasons, MARAD finds that good cause exists under 5 U.S.C. 553(d)(3) for this rule to take immediate effect.
Although this interim final rule is effective immediately, MARAD seeks comment in response to this interim final rule in determining how to proceed with any final rule. Any final rule may differ from today’s rule in response to comments received. Comments are solicited from interested members of the public on all aspects of the interim final rule. MARAD is interested in information concerning whether the rule will be comprehensive and effective at ensuring that all qualified vessel operators may overcome potential obstacles to admission.
Comments must be submitted on or before the date indicated in the DATES section at the beginning of this document. MARAD believes that the 60-day comment period will allow commenters sufficient time to address any issues raised by the interim final rule and still meet the national security demands contemplated.
