Rural Decentralized Water System Grant Program

The Rural Decentralized Water Systems Program is administered by the Rural Utilities Service, a Rural Development mission area of the U.S. Department of Agriculture. Through this Fiscal Year 2026 second funding opportunity, the agency is accepting additional applications from qualified applicants for grants that establish lending programs serving individuals with low to moderate incomes. The program addresses situations in which extending public water or wastewater service to individual residences is not technically or financially feasible. Its purpose is to help individuals finance household water well systems and individually owned household decentralized wastewater systems that they own or will own. The program is authorized under Section 306E of the Consolidated Farm and Rural Development Act and implemented through 7 CFR part 1776, together with applicable Federal grant requirements. Grant recipients use program funds to establish revolving lending programs that provide household water well and wastewater system loans and sub-grants to eligible individuals. Individuals may use those funds to construct, refurbish, and service household water wells or decentralized wastewater systems up to the point of entry to the residence. When ground well water contamination is documented, funding may in certain circumstances support work beyond the point of entry. An individual loan may not exceed USD 15,000 and may have a term of up to 20 years at a one percent annual interest rate. Where necessary, up to 50 percent of awarded funds may be used for sub-grants to reduce costs associated with constructing, refurbishing, rehabilitating, or replacing individually owned decentralized water well and wastewater systems. Approximately USD 11,000,000 is anticipated for this funding announcement, including USD 1,000,000 for applications directly supporting sub-grants for individually owned household decentralized wastewater systems. No minimum or maximum grant award amount is established. Eligible applicants must satisfy the requirements of 7 CFR 1776.5 as well as the applicable program requirements identified in the notice. The notice explains that private nonprofit organizations receive DWS grant funds to establish the lending programs. Applicants must also be able to meet the intent and requirements referenced in 7 CFR part 1776. Non-Tribal applicants proposing to serve households on Tribal lands must submit a Tribal Resolution of Support from the Tribe or Tribes having jurisdiction over those lands. Loan and sub-grant recipients must qualify as eligible individuals under the cited program regulations. Applicant contribution requirements apply to revolving funds under 7 CFR 1776.9(b)(3), while cost share requirements do not apply to sub-grant awards. The notice does not state the contribution amount itself. Applications are accepted electronically only through Grants.gov. Applicants must have an active System for Award Management registration, obtain and provide a valid Unique Entity Identifier, complete the Financial Assistance General Certifications and Representations in SAM, and maintain current SAM information as required. Applicants must use the applicable Fiscal Year 2026 DWS Application Guide, the notice, and 7 CFR part 1776 to prepare a complete application. The notice specifically instructs applicants seeking administrative points to include a separate work plan section titled Administrative Points and provide the information required by 7 CFR 1776.9(b)(7). Applicants should also provide a Tribal Resolution of Support when the stated Tribal lands condition applies. Late, incomplete, or ineligible applications will not be accepted or considered. Eligible and complete applications are evaluated competitively using the scoring criteria in 7 CFR 1776.9 and the notice. Failure to address any application criterion by the deadline makes an application ineligible. Applications may receive up to 10 administrative points. Complete and eligible applications are reviewed by Rural Utilities Service employees from Water and Environmental Programs, with scores based on averages of reviewer scores and discretionary points awarded by the RUS Administrator. Applications are ranked based on scoring results and funding availability. The agency may offer less funding than requested and may decline to fund low-scoring projects even when funds remain. Projects determined technically infeasible or otherwise ineligible will not proceed. Selected applicants receive an award letter and grant agreement, and approved funds are released during the grant period as reimbursement for eligible and approved activities supported by appropriate documentation. The application period opened July 24, 2026, and completed electronic applications are due through Grants.gov by 11:59 p.m. Eastern Time on September 30, 2026. If the submission deadline falls on a Saturday, Sunday, or Federal holiday, the application is due the next business day. The anticipated award date is Winter 2026, and the performance period is January 1, 2027 through December 31, 2027. Prior DWS grants cannot be renewed or supplemented, although existing DWS awardees may apply for new projects that will be evaluated as new applications. The notice does not establish this opportunity as recurring or provide a future-cycle date. Program questions may be directed to Sandra Alarcon, Community Programs Specialist, Water and Environmental Programs, Rural Utilities Service, USDA, at Water-RD@usda.gov or 202-568-1119.

Register and submit early because registration processes may take up to 10 business days. Use the most updated DWS Application Guide and include every required item because incomplete applications will not be considered. Address every application criterion by the deadline because failure to do so results in ineligibility. Applicants seeking administrative points should include the required separate Administrative Points section in the work plan. Verify the correct UEI on the SF-424 and submit electronically through Grants.gov before the deadline.