Rural transportation grants for ride companies: Section 5311, USDA, and VA highly rural funds

Rural ride money is real, but almost none of it names a for-profit van company as the recipient. Each federal program spells out who may receive it, and a private van company usually reaches it by contracting with the transit agency, county, nonprofit, or veterans group that does. That makes the useful questions practical ones: who holds the money in your county, when they decide how to spend it, and what they need from a contractor.

Three funds, three kinds of grantee

Each of the three main rural funds names its own grantees, and none of the lists includes an ordinary for-profit NEMT company:

Section 5310, the federal program for rides that serve older adults and riders with disabilities in cities and rural areas alike, has its own guide: Section 5310 for NEMT providers.

Section 5311: rural transit money and the service it buys

Section 5311 is FTA’s formula money for rural public transportation, meaning anywhere outside an urbanized area of 50,000 people or more. The fiscal year 2025 apportionment was $956,643,454, and each year’s money stays available for three fiscal years. States and tribes receive it. Under 49 U.S.C. 5311, subrecipients are state or local government authorities, nonprofits, and operators of public transportation or intercity bus service.

The door for a private company is in the statute itself. Grants can pay for “the acquisition of public transportation services, including service agreements with private providers of public transportation service,” and those agreements belong in each state’s program of public transportation projects. FTA lists non-emergency medical transportation among eligible activities. Its program circular, C 9040.1H, tells each state to make sure private operators get a chance to take part, either through service agreements with transit operators or as subrecipients.

The federal share sets the agency’s budget math:

• Standard shares. Up to 80 percent of net capital and planning costs and up to 50 percent of net operating costs.
• Sliding-scale states. States covered by the sliding scale in 23 U.S.C. 120(b) get a higher capital share, and their operating share is 62.5 percent of that capital share. Nevada’s program lists 95 to 5 for planning and capital and 59.38 to 40.62 for operating.
• Local match. It can come from service agreements with state or local social service agencies or private social service organizations, and from other federal agencies’ transportation money. FTA funds, including Section 5310, cannot match 5311.

Your vans can count as capital

When an agency buys service from a contractor that supplies the vehicles, FTA treats the capital consumed during the contract as an eligible capital cost and funds 80 percent of it. FTA calls this the capital cost of contracting. The capital consumed is the vehicles’ depreciation while in service under the contract, plus a proportionate share of the interest the contractor pays to buy them. Only privately owned assets qualify: a van bought with federal, state, or local government money does not. In a bid, separate the depreciation and interest on your own vans from the operating price, so the agency can fund that part at the higher share.

Two state plans, two different doors

States run 5311 their own way, and the state management plan says how. Two examples:

• Nevada. NDOT’s program page says private for-profit operators of transit service may take part as third-party contractors for the state or as subrecipients. Every project has to be part of a coordinated transportation plan developed locally.
• West Virginia. The Division of Public Transit’s plan, revised January 2019, lets private for-profit operators take part only through contracts with eligible recipients. It treats taxis as exclusive-ride service and ineligible. It funds only one 5311 grantee per county. Each January it posts a public notice telling private providers a new grant cycle will start in the summer, and operating contracts are signed in June for a July 1 project year. Human service agency contract income can count as local match only if those contract services cover their direct operating costs without 5311 money, and at least 25 percent of NEMT must be credited to the fare box.

In a West Virginia county, that means one 5311 buyer: the county’s grantee. Get your offer to it before the January notice. One compliance rule follows the money everywhere: 49 CFR 655.3 puts every contractor of a 5311 recipient or subrecipient under FTA’s testing rules for drugs and alcohol. Rural NEMT covers how this work fits next to long-distance Medicaid trips.

USDA Community Facilities grants

USDA’s Community Facilities grants pay for essential community facilities in rural areas, which for this program means a city, town, or unincorporated area of 20,000 people or fewer under the latest census. Only three kinds of applicants qualify: public bodies such as counties and towns, nonprofits with strong local ties, and tribes the federal government recognizes. A private company cannot apply.

The grant rule, 7 CFR 3570.62, counts health services, along with community and social services, as essential facilities. Grants can also pay for major equipment that itself provides an essential service. The rule’s examples are solid waste trucks, fire equipment, and X-ray machines, so ask the Rural Development state office whether a vehicle would qualify before a grantee plans around one. The grant share depends on the community’s size and its median household income, measured against the higher of the poverty line or a percentage of the state’s nonmetropolitan median household income:

A 15 percent share applies where income is below 90 percent of the state figure. The limits matter as much as the shares. The grant cannot cover start-up operating expenses or yearly recurring costs unless a Community Facilities loan is part of the package. It cannot refinance debt or pay interest. The applicant must certify that it cannot finance the project from its own resources or commercial credit.

The opening for a private operator is in 7 CFR 3570.61(e). A facility may be operated, maintained, or managed by a third party under contract, while the grantee keeps the responsibility for it. A county or community nonprofit planning a project can name an operator, and the facility has to serve the public at large without discrimination.

VA Highly Rural Transportation Grants

VA’s grants pay for free rides to VA and VA-authorized care for veterans in highly rural areas, meaning one or more counties averaging under seven residents per square mile. Under 38 CFR 17.700 to 17.730:

• Who applies. Veterans Service Organizations, plus the state agency that handles veterans’ benefits.
• How much. No more than $50,000 per highly rural area per fiscal year, with no matching funds, and one grantee per area.
• Who drives. Subrecipients named in the grantee’s application can receive part of the money.
• Vehicle rules. Title vests in the grantee or the named subrecipient, or a lessor for leased vehicles. Vehicles carry liability insurance like the owner’s own, drivers hold a state license, upkeep follows the manufacturer’s schedule, and service meets DOT’s ADA transit rules.
• Reports. Quarterly and annual reports on time spent, funds spent, trips completed, distance covered, veterans served, locations served, and a rider satisfaction survey.

For fiscal year 2026, VA posted separate notices for new and renewal grants on April 1, 2026, both closing May 5, 2026, with about $7 million authorized for the year. The renewal notice expected about 12 grantees, with awards from $30,000 to $2.5 million for one-year terms. Applicants need an EIN, a UEI, and an active SAM.gov registration.

Where the highly rural counties are

VA’s fiscal year 2026 county list names 446 eligible counties in 25 states, and 220 of them had a grantee. Kansas (42 counties), Colorado (24), Idaho (17), Utah (13), and Oklahoma (10) had none anywhere. States with 10 or more eligible counties:

If you run vans in an eligible county with no grantee, a veterans group could apply in the next cycle with your company as the named subrecipient. VA transportation contracts covers the other ways VA buys rides.

Getting paid from rural grant money

The work starts months before any notice is posted:

1. Find the grantee in your county. For 5311, the state DOT’s transit office can name every subrecipient, and its state management plan explains how projects are chosen.
2. Learn the calendar. Ask when the state posts its notice to private providers and when it sets the program of projects.
3. Put a service offer in writing. List your counties, your vehicles and how many wheelchairs each carries, your service hours, and a rate per trip or per hour. Price the depreciation and interest on your own vans separately. For the offer itself, see government NEMT contracts.
4. Get into the coordinated plan. Projects for several programs must appear in the region’s coordinated transportation plan, so ask the planning agency to list you as an available provider.
5. Approach USDA projects through the owner. Talk to the county or nonprofit planning a Community Facilities project about operating it under contract.
6. Approach veterans groups before spring. Check VA’s county list, then call the state veterans agency and local Veterans Service Organizations months before the notice opens.
7. Line up compliance. Testing for drugs and alcohol that satisfies FTA rules for 5311 work, insurance that meets the agency’s required limits, and ADA-ready vehicles.

Reports a grantee will ask you for

Grantees answer to their funders with trip counts, miles, and riders served, and they pass that work to their contractors. HealthRide keeps GPS-recorded miles and scheduled versus actual times on every trip. The trip log for any date range downloads in spreadsheet or PDF form, and the on-time report sits beside it. See reports.