The $1.093b in mandatory appropriations estimated for FY25 in the WH FY26 Budget is now, per OpenOMB reports, the actual amount. Per the recently passed spending bills, the $8m discretionary appropriation proposed for the program in the budget is now $65m (for what, given the $300m+ in carryover authority? — but that’s another topic).
When the WH FY27 Budget comes out in a month or so, there’ll presumably be an estimate for FY26 mandatory appropriations. Will the amount be over $1b?
Of WIFIA’s $23b portfolio of loan commitments, about $17b of commitments were executed or re-executed (reset) in FY20-FY22, at an average rate of about 2.25%. I’m assuming that the $10b in loan disbursements reported in mid-2025 came from this cohort — as discussed in a prior post, borrowers would have incentive to draw once ST rates started to rise over 2.25% in 2022 and actual project expenditure would be the limiting factor on disbursements. I’m estimating that by the start of FY25 disbursements would have reached $5b, with another $5b drawn in FY 2025. This matches the pattern of technical re-estimates (which are triggered by disbursement) and prevailing interest rates.
Probably between $800m and $1.2b, but maybe $2b
At the start of FY26, therefore, I think about $7b of this ‘low rate’ cohort remained to be drawn. If the pace of construction allowed $5b in draws in FY25, I can’t think of any reason that would slow this year, and WIFIA loans remain the borrowers’ cheapest financing alternative. But maybe the average interest rate of the undrawn cohort would have risen a bit (as older, lowest rate loans were drawn first) — say to 2.75% or 3.00%, so the re-estimates in FY26 would be about $800m.
Perhaps more will be disbursed — construction inflation might prompt a speedy schedule, and fears about some sort of federal slowdown occurring again would incentivize getting the cheap money in hand ASAP. So possibly the rest of the $7b will be drawn in FY26, which would result in a re-estimates of about $1.2b, assuming my guesses about average loan interest rate are correct.
It should be noted the number is really sensitive to that assumption — if $7b with an average rate of 2.50% is drawn at an average UST rate of 4.50%, we could even see FY26 mandatory appropriations estimates over $2b.
No future gains, of course
Large disbursements will likely end in FY26. The undrawn $6b of commitments executed FY23-FY26 have much higher interest rates relative to prevailing ST finance, and less construction progress. The borrowers would likely view these WIFIA loan commitments, not as a source of finance, but as an interest rate cap. They’ll wait to see where things go — e.g., a politically pliant Fed chairman tries to lower rates for the election or for an AI crash, or something else — and constantly evaluate their options. Perhaps a reset, especially for the commitments executed FYTD26, which could comply with the WIFIA reset rules (less than 50% eligible capex expended) and whose borrowers likely have political pull (looking at you, Zeldin letters). Who knows? But one thing is for certain — the undrawn $6b will not be a source of material funding gains.