Grocery Access Revolving Loan Program

Summary#

This bill creates a federal grant program to help states set up revolving loan funds. The funds will lend money to open or support grocery stores in underserved communities, and to increase access to healthy food. The goal is to reduce “food deserts” by making it easier and cheaper to open and run grocery stores that sell fresh, healthful food.

• The Secretary of Agriculture will give capitalization grants to states. States deposit those grants into a revolving fund that makes loans to grocery stores and related programs.
• Loans may be used to open or operate grocery stores, increase access to healthy food, or support program participants serving underserved areas. Loans may not be used for new construction.
• Loan recipients must provide at least 20% of the loan amount from non‑Federal funds. States must charge no more than a 4% administrative fee on loans.
• Loans must be at or below market interest rates and may be interest free for up to 30 years (or the project’s useful life, if shorter). Repayments return to the revolving fund.
• The bill authorizes $150 million for fiscal year 2026. States get money based on the population of underserved communities in each state.
• The bill relies on existing legal definitions (for “underserved community” and “staple food”) by referring to other laws.

What it means for you#

• State governments: States that want funding must create a revolving fund that follows the bill’s rules and set up an application process. They will administer loans through a state instrumentality and may charge up to 4% per loan for administration.
• Grocery stores and local food projects: Eligible stores must focus on unprocessed, healthful foods, offer fruits and vegetables, carry staple foods, and keep them in stock when possible. Applicants must show they can run a store or have partnerships that provide business help. Stores must match at least 20% of a loan with non‑Federal funds.
• Small businesses and non‑profits: Loans may be offered at low or no interest for up to 30 years, which could make financing cheaper. Nonprofit or municipally owned stores must reinvest earnings tied to these loans back into operations.
• Residents of underserved communities: The program could increase local access to fresh food and grocery options if stores are opened or kept open with these loans. Priority is given to projects that hire local residents, provide nutrition education, source from local farms, or show supply-chain relationships.
• Taxpayers: The federal government is asked to provide $150 million for fiscal year 2026 to start the program. Ongoing costs beyond that authorization are not described in the bill text.
• Lenders and creditors: In a borrower’s bankruptcy, debts to the revolving fund are given priority over other debts.

Expenses#

Estimated public cost: The bill authorizes $150,000,000 for fiscal year 2026.

• The bill sets a one‑year authorization of $150 million but does not include a multi‑year funding schedule or a full fiscal estimate.
• States will receive grants apportioned by the population of underserved communities in each state.
• States may use up to a 4% fee on each loan to pay for administration of the revolving fund.
• Loan repayments return to the revolving fund and can be reused for new loans.
• No publicly available information in the bill text about estimated ongoing federal administrative costs, staffing, or long‑term budget effects beyond the $150 million authorization.

Proponents' View#

• The bill appears intended to increase access to healthy, affordable food in underserved communities by making capital available for grocery stores.
• Supporters may argue the program reduces financing barriers by offering loans at or below market rates, including the option of long, interest‑free loans.
• The bill aims to encourage stores that sell unprocessed, healthful foods and staple items, and to keep those foods in stock.
• The program focuses on local economic benefits by prioritizing hiring local workers, offering nutrition education, and sourcing from local farms.
• Technical assistance from the Department of Agriculture is included to help new or small operators with sourcing, storage, and operations.

Opponents' View#

• One concern is the limited authorization amount: $150 million for one fiscal year may be small compared with the nationwide need for grocery access in many underserved areas.
• The bill bars use of loans for new construction. This may limit projects that need to build a new store where no suitable existing building exists.
• The required 20% non‑Federal match could be a barrier for very small or community‑led projects that lack upfront capital.
• The bill does not provide a fiscal estimate of ongoing costs, oversight mechanisms, or detailed rules for monitoring loan performance and fund management.
• The definition of “underserved community” is given by reference to another law, so readers must consult that law to know exactly which areas qualify.
• A loan limit that prevents a state from lending more than 10% of its fund to a single participant in a year could restrict larger or multi‑site projects.
• It is unclear from the bill whether loans may cover certain costs such as purchase of an existing building, inventory, or long‑term working capital in all cases; that could create uncertainty for applicants.