USDA grants for rural businesses and farmers

Check whether a round is open before you plan on one. On October 20, 2026, USDA was not taking REAP grant applications (REAP loan guarantees were still open), and the 2026 Value-Added Producer Grant round had closed on April 22, 2026. Grants are awarded in competitive rounds, and you pay part of the cost yourself.

REAP now pays after the project is built. Under USDA's rule in force from October 16, 2026, you plan, pay for and install the project first, and apply 12 to 24 months after it is finished (up to 36 months for the first round under the new rule), with 12 months of energy data from before the project and 12 months from after. The grant is based on the energy the project actually produced or saved.

Rural Energy for America Program (REAP)

• Who: agricultural producers (at least half their gross income from farming) and small businesses in rural areas of 50,000 people or fewer that meet the SBA's size standards, with no delinquent federal taxes or debts.
• What for: renewable energy systems (such as solar, wind, small hydropower, geothermal and biomass) and energy efficiency improvements (such as heating and cooling, insulation, lighting, refrigeration, doors and windows, and replacing inefficient equipment). Efficiency projects need an energy audit or assessment.
• Not eligible since October 16, 2026: ground-mounted solar panels and wind turbines on cropland, solar or wind systems with any part made in a country the government names as a foreign adversary (unless installed before October 1, 2026), ground-mounted solar or wind systems where you cannot show past energy use to match what they produce, and projects spread over more than one location.
• How much: grants of $1,500 to $500,000 for renewable energy systems and $1,500 to $250,000 for energy efficiency, and never more than 25% of the project's cost: you pay at least 75%. A REAP grant and a REAP loan guarantee together can cover at most 75% of the cost.
• How it is awarded: one national competition, plus one for requests of $20,000 or less. The two highest-scoring applications in each state that reach the minimum score are chosen first.

Value-Added Producer Grants (VAPG)

• Who: agricultural producers, producer groups, farmer and rancher cooperatives, and businesses controlled by producers, who own and produce more than half of the raw commodity and will earn more from the value-added product.
• What for: planning (feasibility studies, business and marketing plans), up to $50,000; or working capital for processing, packaging, advertising, inventory and salaries, up to $200,000.
• Match: you put in as much as the grant, in cash or eligible in-kind contributions.
• Awarded nationally by competition. In 2026, USDA gave extra points to first-time applicants and to requests under $125,000, and asked applicants to say who they paid to write the application and how much.

Beware of grant scams: the FTC warns that offers of free government grant money are scams, and that no government agency will contact you to demand a fee to get a grant. Contact your USDA Rural Development state office directly.