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USDOT announces $780m in Rural Surface Transportation Grants

Funding is available for transportation and transit projects in rural areas across the United States.

Rachel DiSalvo •
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Americans living in rural areas often suffer from inadequate transportation infrastructure, particularly public transit. Recognizing the need for targeted investments in rural transportation, Congress created the Rural Surface Transportation Program (“Rural”) in 2022 as part of the Infrastructure Investment and Jobs Act (IIJA) to provide funds to improve mobility in rural communities. 

On March 25, 2024, the Department of Transportation announced a new round of the Rural program, totaling $780 million, along with an additional $4.4 billion for the National Infrastructure Project Assistance (MEGA) and Rebuilding America (INFRA) capital assistance programs, totaling $5.1 billion altogether. Although these programs have been combined into a single Notice of Funding Opportunity, each is a distinct funding stream which can be applied to separately. This NOFO combines funding for the 2025 and 2026 fiscal years.

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Via believes safe, accessible, and equitable transit should be available to all. Rural governments have long struggled to fund transit services and infrastructure, leaving many individuals dependent on cars or without adequate mobility options. Rural Surface Transportation grants can be used to address this challenge by funding a broad range of transportation projects; “on-demand mobility systems” such as microtransit are specifically identified as eligible.  A well-designed microtransit service can cover a large, low-density area with a high quality of service, without the expense of running underutilized fixed routes, making microtransit a particularly attractive solution for rural areas. 

States, local governments, tribal governments, transit agencies and regional transportation planning organizations may apply for funding for projects located in rural areas, which is defined in this program as any area except a Census-designated urbanized area with more than 200,000 population. In other words, non-urbanized areas or urbanized areas with a population of less than 200,000 are both considered “rural.” Furthermore, a project may include some non-rural areas so long as the majority of project costs are spent in rural areas.

10% of funds, or $78 million, are reserved for small projects under $25 million in size. The remaining 90% is reserved for projects greater than $25 million in size. The grant will cover up to 80% of capital costs for eligible projects. In addition, the Department of Transportation will allow applicants to use the FTA’s capital cost of contracting rule to consider some portion of a transportation contract with a private entity as a capital cost. For a turnkey microtransit contract, 50% of the contract may be considered as capital cost, meaning that the Rural grant will cover at least 40% of the total project cost, inclusive of operations.

DOT will evaluate proposals on six criteria: 

  • Economic benefit to the community
  • Impact on climate change, resiliency, and the environment
  • Improvement of equity, quality of life, and transportation access
  • Improvement of safety
  • Maintenance of a state of good repair 
  • Demonstration of innovative project delivery and financing approaches.

For small projects (under $25 million), only three criteria will be considered: safety; climate change, resiliency, and the environment; and equity, quality of life, and transportation access.

More detailed information about the grant, including selection criteria and eligible projects, can be found in the Notice of Funding Opportunity here. For information on how to apply, please see the program page here. If you’re interested in applying to launch a TransitTech-enabled service like the ones mentioned above, please reach out to our team at We would love to support your efforts. 

Applications are due May 6, 2024.

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Rachel DiSalvo avatar
Rachel DiSalvo

Rachel DiSalvo is a Grants and Funding Principal at Via, specializing in helping Via's public sector partners identify and apply for transit funding opportunities.