USDA Delivers Final Rule to Revamp REAP Program to White House OMB

by Erin Krueger (Ethanol Producer Magazine) The USDA on June 15 delivered a final rule to the White House Office of Management and Budget that would, in part, “simplify and streamline requirements and processes” for the Rural Energy for America Program.

REAP provides guaranteed loan financing and grant funding to agricultural producers and rural small businesses for renewable energy systems or to make energy efficiency improvements. Renewable biomass, including anaerobic digesters and biogas, wind, solar, small hydro-electric, ocean, geothermal, or hydrogen derived from any of those sources are among the renewable energy sources eligible for the program. Past recipients of REAP awards have used the funds to improve operations at ethanol, biodiesel and wood pellet plants. Biogas projects and biomass-fueled combined-heat-and-power (CHP) projects have also received funding through REAP in the past.

The USDA in October 2024 published a notice of funding opportunity (NOFO) that set series of REAP application deadlines for fiscal year (FY) 2025, 2026 and 2027 funding. The deadlines spanned from Dec. 31, 2024, through March 31, 2027.

The USDA on April 14 published a notice in the Federal Register formally rescinding the October 2024 NOFO. “The agency is currently promulgating regulatory changes to the REAP program and available funding will be announced after publication of said changes,” the agency said in the notice. “Applicants who previously submitted applications will be required to submit a new application and must comply with the new regulation. This applies to any applicant that does not possess a fully executed Financial Assistance Agreement.”

The move to rescind the NOFO came less than a month after the agency formally announced it was no longer processing existing REAP applications. That announcement, issued by the USDA Rural Business Cooperative Service on March 31, 2026, indicated the agency would halt processing of REAP grant applications until the agency updates program regulations to comply with Executive Order 14315, titled “Ending Market Distorting Subsidies for Unreliable, Foreign Controlled Energy Source.”

With submission of a final rule to the OMB, the USDA may be implementing some of its planned changes to the REAP program. The rule is formally titled “Unleashing American Energy and Economic Prosperity under Title 7 Code of Federal Regulations Part 4280 Subpart B.” READ MORE

Excerpt from U.S. Department of Agriculture: Rural Business Cooperative Service intends to update the regulations at 7 CFR 4280 Subpart B to comply with Executive Order 14315, Ending Market Distorting Subsidies for Unreliable, Foreign Controlled Energy Sources. Accordingly, the Rural Energy for America Program will not be making further grant awards until the new regulations are in effect. A new Notice of Funding Opportunity will be published in accordance with the new regulations once they are effective, and any applicants who previously submitted an application will have the opportunity to reapply. This applies to any applicant that does not possess a fully executed Financial Assistance Agreement. REAP Guaranteed Loans will continue to be awarded during this time. Prospective applicants should view the FAQ’s and check the program website for any further updates.

These changes reflect our commitment to ending the massive cost of providing taxpayer handouts for unreliable energy sources and follows Administrative priorities of energy dominance, national security, economic growth, and the fiscal health of the nation. READ MORE