EPA makes about $25 million available for small-community water projects

The Environmental Protection Agency has made approximately $25 million available for fiscal year 2026 drinking-water assistance aimed at small, rural and tribal communities. The funding can support infrastructure upgrades, contamination responses and technical help, but it is not an automatic award to local communities.

EPA announced the Small, Rural, and Tribal Drinking Water Assistance Grant Program allotment on June 26, 2026. The program page was updated July 28. Funding for states and territories is distributed through a formula that considers factors including poverty, small water systems and underserved communities. EPA says tribal funding is handled through a separate allotment.

What the funding can cover

Eligible work can include drinking-water treatment, transmission and distribution, storage, source improvements, new systems and consolidation. The program also can support household water-quality testing, including testing for unregulated contaminants, and drinking-water contamination response efforts.

Funds may also be used for Safe Drinking Water Act compliance and for technical, managerial and financial capacity building. That assistance can help systems with engineering, planning, budgeting, operations or compliance work that may be needed before an infrastructure project can move forward.

Local systems do not apply directly to EPA

The program is noncompetitive but voluntary. States, territories and tribes must apply to EPA and submit required work plans. Once funds are provided to states and territories, local water systems generally seek assistance through their respective state programs rather than receiving direct EPA awards under this mechanism.

Projects must take place in communities that meet the program’s definitions of underserved, small and disadvantaged under the Safe Drinking Water Act. EPA’s guidance includes communities without household drinking-water or wastewater service, systems that violate or exceed certain drinking-water standards, and communities that meet state affordability criteria or have fewer than 10,000 residents without sufficient debt capacity to finance a project.

That structure means a state or territory’s listed allotment is not proof that a particular community has been selected or that construction has started. Local results will depend on state participation, project design, documentation, engineering and the ability of water systems to complete the application and compliance process.

EPA says applications will be reviewed on a rolling basis

EPA’s updated program guidance says states may apply after their allotments are announced, and that funding will be awarded on a rolling basis as applications are received. States must submit draft work plans to their EPA regions before applying. EPA anticipates that general project and budget periods will be no more than three years, although the timing of local assistance will depend on state administration.

EPA also acknowledged implementation problems at a July 10 roundtable with states, water systems, associations and technical-assistance providers. The agency said the discussion addressed delays and barriers that can affect small communities seeking infrastructure funding. EPA said it would develop an online toolbox and form workgroups with states and water-sector partners.

Those tools and workgroups were planned actions, not evidence that delays had already been eliminated. For communities with limited staff, the implementation chain may be as important as the amount of money available.

A separate loan program is also changing

EPA separately announced a fee waiver for some small communities using the Water Infrastructure Finance and Innovation Act program, known as WIFIA. That action concerns loans, not SmaRT grants, and has a different eligibility and financing structure. EPA said the waiver could eliminate nearly $200,000 in application and credit-processing fees for eligible small-community loan applicants, subject to program requirements and available administrative funds.

For residents and local officials, the practical next step is to watch their state drinking-water or environmental agency for announcements about applications and technical assistance. The federal allotment may help targeted small-system needs, including lead, PFAS and aging-infrastructure work, but it does not guarantee a project award to any particular community.

Sources

• EPA SmaRT Drinking Water Assistance Grant Program guidance