Construction Grants 101: Tips for Contractors & Project Owners

Accessing enough funding for a construction project can represent a huge challenge for general contractors. Project owners and contractors often assemble a complement of funding sources that include loans and private investments. Grants make an excellent addition to this collection because they offer the added benefit of not having to be repaid.

Grants often come with stipulations that can dictate which projects are eligible for funding based on specific characteristics, like the employees who work on it, the companies that apply or locales where the project can be located. For instance, the Economic Development and Recovery grants are available to help communities develop economic recovery plans for areas that have experienced a major disaster declaration.

This article will help general contractors and owners understand the role grants can play in project funding, where to find upcoming grant applications and best practices for managing grant funding.

What are construction grants?

Construction grants are lump sums of money that governments, not-for-profit organizations and corporations set aside to help owners and contractors complete construction projects.

Their purpose is to facilitate the development of certain assets — like infrastructure and public facilities — encourage innovation, promote sustainability or support economic development in the recipient areas. For example, a state might apply for federal funding to help finance a new highway project.

Grants are often posted to public lists and forums where contractors and owners can search, get familiar with all the requirements and find applications. For instance, US government grants can be found on the Grants.gov database, which is searchable and offers helpful resources for completing grant applications.

Grants can be very helpful for construction projects because, unlike loans, they don’t have to be paid back.

Who is eligible?

Grant applications may be available to many different entities. Often, project owners are the ones to apply for project grants, then use the money to pay for the contractor to complete the work. For example, a nonprofit that wants to open up a youth arts center may apply for a grant that will help with organizational and building costs. Other entities that may apply include:

• Government agencies
• Educational institutions
• Private contractors and developers

Examples of Construction Grants in the US

Grants can be organized to achieve a variety of outcomes and come from different sources.

Federal grants put up governmental money to help further national goals. For example, the F25AS00188 Coastal Program FY25 was set up to help coastal communities address the challenges of conservation efforts in priority coastal ecosystems.

State and local development grants often focus on regional infrastructure projects. For instance, Montana’s Renewable Resource Grant and Loan Program funds the development and management of natural resources.

Private and non-profit grants help with projects that support specific missions, like the grant M.J. Murdock Charitable Trust awarded to Gamers Sports Travel to facilitate the construction of a new sporting facility in Anchorage, Alaska that help to make a broader range of sports accessible to local youth.

Where to Find Construction Grants

Finding grants that apply to upcoming projects can be challenging. Still, there are always new opportunities coming up if contractors take the time to search a few different resources.

Online Grant Databases

Contractors can check out online listings to find funding opportunities. While Grants.gov is the ultimate source for information about the grants and ultimately where contractors will apply for federal grants, there are a vast number of entries there that can quickly overwhelm applicants. There may be better places to conduct preliminary searches that can help narrow the options. Other grant databases include GrantWatch, FederalGrants.com and GrantStation.

Industry Publications and Newsletters

New grants are often widely announced inside industry circles. Construction journals and email or online newsletters can be a great source for finding grants that apply to contractors in certain niches or locales.

Government Agency Websites

Agencies that release grants often announce them on their websites. Contractors can check in frequently with agencies that might provide grants that apply to their work specialties. For instance, contractors who specialize in installing high-efficiency HVAC systems might check in with the Department of Energy to watch for funding opportunities there.

How to Apply for Construction Grants

Once an applicant finds the grants that apply best to them, they can usually apply online through a set process.

1. Read through all grant information thoroughly.

Applicants should read and understand all the information provided about the grant eligibility, deadlines, and application requirements. Some requirements may take some time to prepare, so putting the pieces together efficiently will be critical to success.

2. Align the proposal with the grant’s criteria.

Preparing a convincing grant proposal includes making a case for the overall need for the finished asset and how well the proposed project aligns with the program’s criteria and purpose. Contractors should make it clear how they meet as many of the grant’s criteria as possible.

3. Collect all necessary signatures and information.

There will be a lot of separate forms and signatures that need to be completed in a grant application, including a budget plan, standard assurances, and information about the project timeline. Some of these forms will involve simple signatures while others involve a lot of preparation. Check them out early to see what’s involved. Federal grants applications through Grants.gov are helped along by a system that automatically notifies the applicant of missing information or forms.

Tips for Winning More Construction Grants

Not every application will succeed in securing funding for an upcoming job. Contractors should be careful to select opportunities that fit with grant criteria and align with its stated goals before spending the time and effort to apply.

Narrow the search.

Well-known grants may involve a lot of competition with other organizations and contracting teams. Since grant applications can be time-consuming, contractors can search for lesser-known grant opportunities for better odds of success, and then apply only to the ones that look like the best fit.

Align with the criteria.

Grant applications are great sources of information about what the funding organization wants to see from the project. Contractors should read and consider these criteria carefully and apply to applications that best match up with the project at hand and their own professional standards and priorities.

Consider partnering with another entity.

Construction grants are often geared toward project owner-applicants. While contractors can themselves apply, they might have better odds of success if they partner with a municipality, a non-profit or a corporation to complete the application.

Ask questions.

The grant’s program manager may be well motivated to see the funding used to create new assets and opportunities. Applicants can ask questions and discuss criteria to get a fuller understanding and better demonstrate how the upcoming project could fit into the issuing organization’s mandate.

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Develop a Process for Grant Application

Construction funding can be challenging and often involves many different types of financial products like loans, credit cards, and lump sums of cash. Accessing construction grants can help communities and organizations fulfill their goals and help contractors finance projects.

While finding and applying for grants can be time-consuming, knowing how to find and assess opportunities for the best fit can help shorten the process. Contractors should work to create a work process to guide the search for grant funding and for completing applications.

Finally, to improve their chances, contractors may consider partnering with a non-profit organization or a local or state government to apply for grant funding.

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