Defense Production Act (DPA)

In response to the COVID-19 global crisis, DFC is seeking to strengthen and restore domestic industrial base capabilities through the Defense Production Act (DPA). The President’s Executive Order signed on May 14, 2020 provides DFC the tools under the DPA to re-shore domestic production of strategic resources needed to respond to the COVID-19 outbreak, and to strengthen any relevant domestic supply chains.

DFC brings decades of federal credit experience to bear, advancing key national objectives and addressing domestic challenges in response to the current outbreak. DFC also has the unique ability to address this crisis with a global perspective, coordinating their international efforts with this new domestic, time-limited authority.

Eligible Projects

As listed in Section 2(c) of Executive Order 13922, projects eligible for a DFC-DPA Loan are those that create, maintain, protect, expand, or restore domestic industrial base capabilities supporting:

  • The national response and recovery to the COVID-19 outbreak; or
  • The resiliency of any relevant domestic supply chains

Conditions of DPA-DFC Loans

Loans made under the DFC-DPA Program may only be offered if financial assistance is not otherwise available from a private source on reasonable terms; and if the Chief Executive Officer of DFC makes the following determinations:

  • The loan supports the production or supply of an industrial resource, critical technology item, or material that is essential to the national defense;
  • Without the loan, the U.S. industry cannot reasonably be expected to provide the needed capacity, technological processes, or materials in a timely manner;
  • The loan is the most cost-effective, expedient, and practical alternative method for meeting the need;
  • There is a reasonable assurance of repayment of the loan in accordance with the terms of the loan; and
  • The loan bears a reasonable interest rate

Maximum Principal

Maximum principal will be determined on a project-by-project basis.  Except in limited circumstances, the loan should not exceed 80% of the total cost of the project.

Use of Proceeds

The DFC-DPA Loan Program can be used for the acquisition, development, construction, ownership, operation of facilities or equipment, working capital, or other costs associated with an approved project.

Frequently Asked Questions

Answers to DFC's frequently asked questions can be found on the DFC COVID-19 Response Efforts Under the Defense Production Act fact sheet.

Interest Rates

The interest rate will be determined on a project-by-project basis.

Fees

Fees and other charges may be collected in connection with loans made under the DFC-DPA Loan Program.

Maximum Maturity Date

The maturity will be determined on a project-by-project basis taking into account the useful economic life of any assets financed, but no loan will have a maturity greater than 25 years.

Application Process

An applicant must submit DFC Form-014 (DFC-DPA Loan Program Application Form) to dpa@dfc.gov. Before or after applying, an applicant may request, or DFC may wish to send a letter of interest (LOI). An LOI implies DFC’s willingness to continue discussing the (potential) application.

Following an applicant’s submission of an application, DFC will decide whether the proposed transaction meets minimum eligibility requirements.  During the screening process, DFC may request additional information from the applicant to help determine the viability of the proposed project.

Following a successful application, the transaction will undergo environmental, credit, and legal due diligence.  DFC may request the applicant to retain outside consulting services to assess relevant aspects of the project/transaction. Those costs may be included in the project costs listed in the financial plan.

Following successful completion of due diligence, the project will be submitted to the Chief Executive Officer of the DFC for approval, considering the requirements above. If approved, the DFC and borrower may sign a commitment letter based on the approved term sheet.

Following CEO approval, DFC and the borrower will enter into a finance agreement, which will establish the terms relevant to a particular transaction. Once a finance agreement is entered into, the borrower may submit requests for disbursement under the terms of the agreement.

Download DFC's DPA Loan Program Guide, the DFC-DPA Request for Proposal, and the DFC-DOD Memorandum of Agreement on DPA.

Contact DFC's DPA team: +1 (202) 357-3998