Rail Vehicle Replacement Program funding has opened another route for U.S. transit agencies seeking to replace rail equipment. The Federal Transit Administration is now accepting applications for $166 million in Fiscal 2026 grants for new rolling stock.

Rail Vehicle Replacement Program offers $166M
Photo: Alstom

FTA rail vehicle replacement funding targets new rolling stock

The funding comes through the State of Good Repair Grants program and is aimed at replacing locomotives and railcars. Since 2022, the equipment program has received $300 million a year under the Infrastructure Investment and Jobs Act, which expires this year.

Up to three projects may be selected in this round. For each one, the federal grant can cover no more than 50% of the total project cost. According to the Federal Register notice for the FY 2026 Rail Vehicle Replacement Program, applications must be submitted by July 6.

Previous grants show demand for rail equipment support

The previous grant round covered fiscal years 2024-25 and part of fiscal 2026. In that cycle, the FTA awarded $630.86 million for equipment purchases to Metra, the Maryland Department of Transportation, and the Southeastern Pennsylvania Transportation Authority.

Railway Supply has also covered the wider U.S. rail funding context, including earlier Federal Transit Administration support for new rail cars. In the latest cited round, the three selected projects came from 13 applications that together sought $1.97 billion — a sign that demand for FTA rail vehicle replacement funding remains far above the amount available in each competitive round.