The Federal Transit Administration (FTA) announced approximately $166 million in available funding through its Fiscal Year 2026 Rail Vehicle Replacement Program, a competitive grant initiative aimed at helping transit agencies modernize aging passenger rail fleets and improve service reliability across the US.

FTA said the funding will support capital projects to replace outdated rail rolling stock, including passenger railcars and propulsion vehicles used in public transportation service.

The agency noted that roughly one-third of subway and passenger rail vehicles in the US are more than 25 years old, contributing to delays, rising maintenance costs, and rider dissatisfaction.

“Old and unreliable transit infrastructure is unacceptable. America is the greatest country in the world, and our families deserve a transportation network to match,” U.S. Transportation Secretary Sean P. Duffy said in a statement. “This is another example of delivering safer travel, improved reliability, and American-made railcars for the American people.”

FTA’s Rail Replacement Program

The funding opportunity, announced May 27, is part of the Rail Vehicle Replacement Program, a set-aside within the State of Good Repair Formula Grants Program authorized under 49 U.S.C. 5337 and the Infrastructure Investment and Jobs Act. Applications are due July 6.

Eligible recipients include state and local government authorities in urbanized areas that qualify for State of Good Repair Formula Funding. Eligible projects include the replacement of rail rolling stock used in revenue passenger service or propulsion operations. Projects funded through the program must also be included in an agency’s Transit Asset Management (TAM) plan.

FTA said the federal share for projects cannot exceed 80% of the net project cost, while grants from the Rail Vehicle Replacement Program itself are capped at 50% of total eligible project costs.

The funding announcement comes as transit agencies nationwide continue pursuing fleet modernization projects to improve reliability, reduce maintenance needs, and support long-term state-of-good-repair goals amid aging rail infrastructure and growing rider expectations.