Federal and State Grants for Cities and Towns
Municipal government grants fund the infrastructure, public safety, economic development, and community services that cities and towns provide to their residents. Unlike nonprofit grants, municipal grants often involve formula allocations based on population, poverty rates, or other data metrics — but the most significant new funding opportunities come through competitive discretionary grants that require deliberate pursuit. The federal landscape for municipal funding has expanded substantially in recent years through programs like ARPA, the Infrastructure Investment and Jobs Act (IIJA/Bipartisan Infrastructure Law), and the Inflation Reduction Act. This guide covers the major federal and state grant sources for municipal governments.
Major Federal Grant Programs for Municipalities
Community Development Block Grant (CDBG)
CDBG is the foundational formula grant for municipalities with populations over 50,000 (entitlement communities) and urban counties. HUD allocates CDBG annually based on population, poverty, and housing overcrowding data. Eligible activities are broad: housing rehabilitation, public facilities, economic development, public services (capped at 15% of annual award), and administration. Entitlement grantees have significant flexibility in how they deploy CDBG funds, provided 70% of the benefit goes to low- and moderate-income people. Smaller municipalities access CDBG through their state's CDBG program (non-entitlement CDBG), administered by the state and awarded competitively or by formula to smaller communities.
American Rescue Plan Act (ARPA) — State and Local Fiscal Recovery Funds
ARPA provided $350 billion to state, local, territorial, and tribal governments to respond to the COVID-19 pandemic. While most ARPA funds were obligated by the end of 2024, municipalities may still be in the expenditure phase through December 2026. ARPA eligible uses include revenue replacement, water and sewer infrastructure, broadband, public health, and economic development. Municipalities should be tracking their ARPA compliance requirements and any remaining unobligated funds carefully.
Bipartisan Infrastructure Law — Formula and Competitive Programs
The Infrastructure Investment and Jobs Act (2021) provided over $1.2 trillion in infrastructure funding, much of which flows to municipalities through formula and competitive programs. Key programs include: Federal Highway Administration grants for road, bridge, and active transportation (administered through states); FHWA RAISE (Rebuilding American Infrastructure with Sustainability and Equity) competitive grants (up to $25 million for rural and $35 million for urban projects); EPA Clean Water State Revolving Fund and Drinking Water SRF for water and sewer infrastructure; and broadband infrastructure grants through NTIA. Municipalities should be working with their state transportation departments and state broadband offices to access formula funds and track competitive opportunities.
COPS Office — Department of Justice
The Community Oriented Policing Services (COPS) Office funds hiring of additional law enforcement officers through the COPS Hiring Program (CHP), which pays up to 75% of the approved entry-level salary and benefits for three years. COPS also funds technology grants for law enforcement equipment, school safety programs, and anti-methamphetamine task forces. Applications are accepted annually; municipalities apply directly to the COPS Office through grants.gov.
FEMA Hazard Mitigation and Preparedness Grants
FEMA funds municipal preparedness and resilience through multiple grant programs: the Hazard Mitigation Grant Program (HMGP, available after declared disasters); the Building Resilient Infrastructure and Communities (BRIC) program for pre-disaster mitigation; the Flood Mitigation Assistance (FMA) program for reducing flood risk in NFIP communities; and the Emergency Management Performance Grants (EMPG) for local emergency management capacity. State emergency management agencies administer FEMA preparedness grants to local governments — municipalities apply through their state emergency management agency.
Environmental Protection Agency (EPA) Municipal Grants
EPA funds water quality, air quality, brownfields cleanup, and environmental justice programs for municipalities. The Brownfields Area-Wide Planning and Multipurpose grants help cities assess and clean up contaminated properties. EPA's Water Infrastructure Finance and Innovation Act (WIFIA) provides low-cost financing for large water infrastructure projects. The Environmental Justice Collaborative Problem-Solving (EJCPS) grants fund community-based environmental justice initiatives that municipalities can partner on with local nonprofits.
Economic Development Administration (EDA)
EDA funds economic infrastructure, regional planning, and capacity building in economically distressed areas. Public Works grants fund construction and renovation of facilities that support private sector job creation. Economic Adjustment Assistance grants address sudden economic distress (factory closures, natural disasters). Planning grants support economic development districts and regional planning commissions. EDA requires matching funds (typically 20–50% of project costs) and focuses on projects that create or retain private-sector jobs.
State Grant Programs for Municipalities
Every state provides grant and formula funding to municipalities through its own programs. Common state municipal grant programs include: transportation enhancement grants through state DOTs; community development grants through state housing and community development agencies; public safety equipment grants through state homeland security offices; energy efficiency grants through state energy offices; and arts and culture grants through state arts agencies. Register with your state's grant portal and establish relationships with state agency program officers to stay current on state grant cycles.
Grant Application Tips for Municipal Governments
- SAM.gov registration is prerequisite: All federal grants require registration in the System for Award Management (SAM.gov). Renew annually — an expired SAM registration will prevent you from receiving a federal award even if you win the competition.
- Hire or designate a grants coordinator: Municipalities that win the most federal competitive grants have staff dedicated to grant research, application development, and compliance. Even a part-time grants coordinator position significantly increases competitive grant revenue.
- Build state legislative relationships: State budget processes include direct appropriations to municipalities. Building relationships with your state representatives and knowing the state budget calendar allows you to advocate for specific line-item appropriations, not just compete for formula or competitive grants.
- Match requirements planning: Federal competitive grants typically require 20–50% matching funds. Identify your match sources — capital reserves, utility revenues, county contributions, private donations — before pursuing major federal competitive grants.
- Regional collaboration: Many federal competitive grants score higher when multiple municipalities collaborate on a regional application. Building regional consortia for broadband, transportation, economic development, and environmental projects increases competitiveness for major awards like RAISE and EDA Public Works.
Find Municipal Grants with FindGrants
Federal grant opportunities for municipalities span HUD, DOJ, EPA, FEMA, EDA, DOT, and dozens of other agencies — plus state programs that vary by location. FindGrants.io indexes federal and state grant opportunities matched to municipal government eligibility, program focus, and geography. Enter your municipality's profile and surface the most relevant grant opportunities across all major sources — so your staff focuses on winning applications, not on grant research.