U.S. Department of Transportation Secretary Sean P. Duffy announced the release of approximately $1.5 billion in competitive grant funding to strengthen the domestic bus manufacturing industry, expand and modernize transit infrastructure, and improve accessibility for American commuters. 

According to the Department, the funding, available through the Federal Transit Administration (FTA), supports the Secretary’s broader “Get America Building Again” initiative.

“This funding will allow transit systems to invest in the vehicles and facilities needed to serve the needs of American families, frontline workers, students, and others who rely on safe, reliable transportation,” said Secretary Duffy. “We’re streamlining the grant process so manufacturers can focus on delivering modern, efficient transit solutions.”

Shift in Federal Grant Criteria

This year’s Notice of Funding Opportunity (NOFO) brings notable changes to the grant qualification process. 

In line with the Department’s current priorities, the NOFO removes federal requirements related to climate change, sustainability, environmental justice, diversity, equity, and inclusion. 

Instead, the revised NOFO focuses on improving tangible outcomes for riders, such as faster bus delivery timelines, increased fleet standardization, and expanded access to essential services for families and communities.

Transit agencies applying for funds are now asked to clearly articulate how their projects will improve accessibility, particularly for households with young children, and how they will support job creation and economic development in their service areas.

About the Programs

The $1.5 billion in funding is split between two FTA programs:

• Grants for Buses and Bus Facilities Program: With approximately $400 million authorized for FY 2025, this program helps transit agencies purchase, upgrade, and maintain buses and build or renovate transit depots, garages, and related infrastructure.

• Low or No Emission (Low-No) Program: With $1.1 billion authorized, the Low-No Program supports the procurement of American-made, low- or zero-emission buses and the equipment and facilities needed to maintain them.

Although the programs are administered separately, the funding opportunities are announced jointly, and each comes with its own eligibility criteria and project scopes, the FTA said.

A Push for Standardization and Speed

In an effort to streamline production and reduce procurement delays, the FTA is encouraging applicants to consider minimizing bus customization. By adopting more standardized vehicle designs, the agency hopes to support American manufacturers in reducing delivery timelines and bringing new buses to market more efficiently.

"Standardization can help stabilize production costs, reduce complexity, and get buses into service faster," the FTA noted in its announcement.