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Funding Guidance

Types of Federal Assistance

When seeking federal support for a project, your city will need to understand the different types available:

  • Discretionary Grants

    Definition: Discretionary grants are competitive. Eligible parties must apply for funding, which is neither guaranteed nor carved out for certain parties. Rather, applications that meet baseline criteria are subsequently ranked based on agency priorities. Each agency’s process will differ, as will program priorities under different leadership.

    Example: Discretionary Grant Program for Charging and Fueling Infrastructure (Community Charging)

  • Formula and Block Grants

    Definition: Formula grants are awarded based on statistical criteria, including (but not limited to) population, socioeconomic status, and demographic characteristics. This process is not competitive; all applicants that meet the desired statistical profile will receive funding. Block grants are similar to formula grants, but they usually fulfill more general purposes and come with fewer restrictions from the Federal Government.

    Example: Environmental and Climate Justice Block Grants

  • Community Project Funding / Congressionally Directed Spending

    Definition: Community Project Funding (CPF) is a special kind of discretionary spending from Congress. In the past, CPF was simply known as “earmarks.” CPF can be used to fund a variety of ambitious, multi-jurisdictional, and “outside-the-box” clean energy projects with fewer guidelines than other programs. Note that Community Project Funding is the name in the House of Representatives; in the U.S. Senate, the funding is simply known as Congressionally Directed Spending. See Community Project Funding for Local Climate Action for more details.

  • Federal Disaster Aid

    Definition: Federal disaster aid becomes available after a presidentially or federally declared disaster. Such declarations enable emergency federal funding and other resources to support communities affected by catastrophic events. Federal agencies may vary in their definitions of disaster-affected communities, so you should consult FEMA’s list of declared disasters, review funding agencies’ guidelines, and/or contact program administrators to clarify your city’s eligibility.

    Example: Disaster Recovery Supplemental Funding

  • Cooperative Agreements

    Definition: Cooperative agreements are typically discretionary legal instruments that allow an agency to provide money or direct assistance to fulfill a public purpose. These awards are used when substantial federal involvement is anticipated. Many grant programs will require cooperative agreements upon the award of funds.

    Example: Cooperative Agreement to Facilitate Coordination Between DOE-NE and Energy Communities, Vital Constituencies, and Educational Groups

  • Technical Assistance

    Definition: Technical assistance is a type of support provided to qualifying entities or applicants that does not involve the transfer of funding, but rather other resources like staff expertise and capacity building. Technical assistance can be leveraged to accelerate or enhance the design of projects or support effective community engagement and planning to increase readiness for future funding. The AFFORD tool only lists federal technical assistance, though other technical assistance opportunities may be available by regional, state-based, and national organizations for equitable climate action and other sustainability projects.

    Example: Communities Local Energy Action Program (LEAP)

  • Installment Loans

    Definition: Installment loans provide capital that must be repaid within a certain time period or “term.” Loan agreements will often include amortization schedules, in which debts are gradually reduced by regular payments throughout the term.

    Example: Energy Infrastructure Reinvestment Program

  • Revolving Loan Funds

    Definition: Revolving loan funds (RLFs) provide an ongoing source of capital to eligible applicants. Following their initial capitalization, RLFs can dispense loans up to a set borrowing limit. When loans are repaid, these funds refill, or “revolve,” to support additional borrowing for new projects. Because RLFs do not set payment plans, they usually require lower borrowing amounts and higher interest compared with installment loans.

    Example: Brownfields Revolving Loan Fund Grants

  • Direct Pay

    Definition: Direct pay allows tax-exempt entities to receive the value of tax credits as refunds. This may be particularly useful in funding city procurement of on-site and off-site renewable energy. See our guidance on leveraging direct pay here.