Through the FY 2025 Disaster Supplemental Grant Program (DSGP), the U.S. Economic Development Administration (EDA) has made available $1.45 billion in federal grant money to help communities recover from natural disasters occurring in 2023 and 2024.
The EDA has a long history of supporting disaster recovery, primarily through funding individual construction projects and targeted economic development activities. The 2025 DSGP expanded the EDA’s traditional role in disaster recovery with the introduction of the “Industry Transformation Path,” which is a relatively flexible grant program offering grants of up to $50 million to support coordinated regional industry investments. Accordingly, the 2025 DSGP offers three unique grant programs or “funding paths” to assist in disaster recovery.
- Readiness Path: Funding to support capacity building and strategic planning projects (i.e., non-construction) to help prepare for future investments. Eligible projects may include developing recovery strategies, hiring recovery staff, and covering pre-development costs such as permitting, engineering reports, environmental documents, and impact assessments. Award range: $250,000 – $500,000. Applications are accepted on a rolling basis.
- Implementation Path: Funding for standalone construction and non-construction projects that support long-term recovery and economic growth. Eligible projects may include, for example, infrastructure upgrades, workforce development programs, or other activities that accelerate industry and growth. Award range: $2 –$20 million (or higher in cases of exceptional need) for construction projects and $100,000 – $5 million for non-construction projects. Applications are accepted on a rolling basis.
- Industry Transformation Path: Funding for coalition-led, multi-project portfolio designed to reshape regional economies through targeted industry development. Each portfolio may include a combination of construction and non-construction projects. Award range: $20 million – $50 million portfolios. Applications are due March 3, 2026, by 5:00 p.m.
Industry Transformation Path: A Closer Look
The new Industry Transformation Path is a unique grant program designed to encourage collaboration between stakeholders in an effort to transform a regional economy through targeted industry development. Key features of the Industry Transformation Path include:
- Multi-Project Design: Each application should propose 3–5 coordinated construction and/or non-construction projects that together will help transform a regional economy. For example, to accelerate the regional food processing industry, a project portfolio might include: (1) building a regional food processing facility, (2) acquiring equipment for job training, (3) expanding transportation infrastructure to move goods, and (4) developing a workforce training program.
- Coalition Approach: Applications must identify a coalition of key stakeholders, including at least one private sector partner. Not all coalition members must be on the list of eligible applicants, but the application must be submitted by an eligible applicant (see below for list of eligible applicants).
- Flexible Use of Funds: The funding may be used to support a variety of construction or non-construction projects, provided the projects satisfy one of the following criteria: (1) mitigate or prevent the impacts of future disasters, (2) replace, repair, or upgrade critical public infrastructure damaged or destroyed by a declared disaster, or (3) diversify and transform local economies through the development or acceleration of industries.
- Investment and Policy Commitments: Applicants are required to secure investment and/or policy commitments before applying. These may include direct funding to support component projects (not already counted as a match); in-kind contributions, including staff time, use of lab or office space, or software; or policy commitments, such as an industry commitment to place trained workers, private-sector commitments to recruit in areas damaged by a disaster, data sharing agreements, and more. See Appendix II of the NOFO for an example commitment letter.
Who is an eligible applicant?
To qualify, the proposed project must be located in, primarily serve, or demonstrably benefit one or more communities that received a Major Disaster Declaration for disaster events in 2023 or 2024. Applications for funding must be submitted by an eligible applicant, which includes:
- States, counties, cities, or other political subdivisions of a state,
- Indian tribes
- District organizations
- Economic development organizations
- Institutions of higher education
- Public and private non-profits working in cooperation with local government, and
- Public-private partnerships for public infrastructure.
Individuals and for-profit entities are not eligible to apply for funding but may be included in a coalition of stakeholders for projects submitted under the Industry Transformation Path.
Matching Requirements
EDA generally expects to fund up to 80% of eligible project costs. Accordingly, applicants must be prepared to provide a 20% match. For the Readiness and Implementation paths, the EDA may cover up to 100% of eligible costs for tribal or severely distressed applicants. For the Industry Transformation Path, matching funds may be distributed across projects. Applicants must submit matching share letters (or equivalent documents) that clearly describe the amount, source, and type of all matching share funds proposed under an award. Specific match and documentation requirements are detailed in the program’s FAQs.
Must applicants apply for the Readiness Path first?
No. Applicants are not required to apply for the Readiness Path before applying for the Implementation or Industry Transformation paths. Eligible applicants may apply for the Readiness Path alone or may apply concurrently with different and distinct projects for each funding path. Applicants should not apply for the same project under different funding paths.
State Law Authority to Accept Federal Grant Funds
N.C.G.S. 160A-17.1 authorizes local governments to accept state and federal grant funds, but only for “for constructing, expanding, maintaining, and operating any project or facility, or performing any function, which such city or county may be authorized by general law or local act to provide or perform.” Accordingly, grant funds may only be expended to support a particular project or program the local government already has legal authority to perform—the grant program itself cannot expand state law authority. For example, a federal program may authorize grantees to provide direct financial assistance to private businesses, but the local government may not have state law authority to provide such direct assistance. For more on state law authority to accept grants, see Kara Millonzi’s blog: Legal Limits on Local Governments to Accept State and Federal Grants and Loans.
Application Deadlines
- Readiness and Implementation Paths: Accepted on a rolling basis.
- Industry Transformation Path: Due March 3, 2026, at 5:00 p.m.
- Due to high demand, the EDA encourages applicants to submit proposals as soon as they are ready.
Applications must be submitted online through EDA’s EDGE portal: required materials are detailed in Section D.2 of the Notice of Funding Opportunity.
GROW NC’s Application Assistance Program
The Governor’s Recovery Office of Western NC (GROW NC) has identified additional resources to support the highest impact and highest need areas in western North Carolina in applying for the EDA’s Disaster Recovery Grants. Eligible applicants seeking assistance on a Return on Investment (ROI) and Impact Analysis Assessment for the EDA application may submit an interest form to GROW NC. Projects will be selected for assistance at three intervals, projects submitted by September 30, November 15, and January 31, 2026.
Resources & Links
