The US Maritime Administration (MARAD) has published an interim final rule revising the entire regulations that govern its Vessel and Shipyard Financing Program, commonly known as the Title XI program. According to MARAD, the changes are intended to modernize the program, streamline requirements, and align the regulations with current federal financing practices. The rule is Docket No. MARAD 2026-1288 and can be found at 91 Fed. Reg. 55486. It became effective on August 28, 2026, and MARAD is accepting public comments through October 27, 2026.

Overview of the Changes

Title XI supports financing for eligible vessel construction, reconstruction, repair, and shipyard modernization projects through federal loan guarantees. The new rule reorganizes and updates regulations that MARAD noted had remained largely unchanged since 1978.

In substance, the new MARAD regulations largely codify existing administrative practices, implement statutory amendments, and adopt government-wide fiscal standards rather than reflect a discretionary policy shift. As a result, MARAD has issued the rule under the “good cause” exception to the Administrative Procedure Act’s notice and comment requirements so that it is already in effect, though MARAD may revise it in response to comments received during the 60-day comment period.

That said, MARAD believes that new regulations will improve clarity, efficiency, and the overall application process for the Title XI program, including the following changes that are discussed in more detail below:

• Streamlined and reorganized regulations
• Updated credit requirements
• A reduction in the application fee from $5,000 to $1,000 and other fee changes
• A formal process for prioritizing certain applications
• Availability of foreign component waivers post approval

Streamlined and Reorganized Regulations

By correcting statutory citations, removing obsolete references, consolidating overlapping provisions, and overall modernizing the text, the revisions aim to improve accessibility of the regulations and to provide prospective applicants and participants with a better understanding of MARAD’s expectations for program participation.

Many terms and conditions previously found in the regulations have been removed and are now found in the application forms and component documents on MARAD’s website. Text that is no longer supported by statutory authority has been removed, such as the authority to finance eligible export vessels that was removed by the National Defense Authorization Act for fiscal year 2020.

Updated Credit Requirements

When the Title XI regulations were first promulgated in 1978, standards had not yet been adopted for determining an applicant’s creditworthiness where that would be a major factor in determining the risk to the government from the applicant’s participation in a particular program. The interim final rule adopts the credit program requirements specified by the Office of Management and Budget in Circular No. A-129, Policies for Federal Credit Programs and Non-Tax Receivables (2025).

Lower Entry Costs

Fees have been reduced to encourage greater program participation. The current $5,000 application fee has been reduced to $1,000 in order to lower the barrier to entry for applicants with limited resources for capital investment.

The former investigation fee has been renamed the commitment fee and has been restructured to reduce the initial costs for larger projects as 1% of the guaranteed note amount or $250,000, whichever is less, reduced by professional service fees paid during due diligence.

The methodology for calculating the guarantee fee is aligned with the credit subsidy fee calculation used elsewhere in federal credit programs.

Prioritization Mechanism

For clarity, the rule explicitly provides that MARAD will prioritize processing applications for vessels determined by the secretary of defense as suitable for service as a US naval or military auxiliary in time of war or national emergency and that meet a shortfall in sealift capacity or capability, followed by Vessels of National Interest as determined by the process provided in the new rule to be of importance for the support of US shipyards and the US Merchant Marine.

Foreign Components

A new separate section contains the requirements for obtaining waivers for foreign components and provides that a foreign component waiver may be granted post approval to ensure that guarantee approvals are not delayed pending the review of such waiver requests.

Looking Ahead

Although the rule is already in effect, MARAD is seeking public comment and may make additional revisions before issuing a final rule. Vessel owners, operators, lenders, and shipyards should monitor developments and consider how the revised regulations may affect future project financing.