Foreign Military Financing

United States money used to pay for a partner government’s purchase. Five notes on the authority behind it, whether it is a grant or a loan, where it may be spent, what it changes about the price of a case, and how it is appropriated each year.

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Five pieces in this topic

What Foreign Military Financing is and who runs it

The authority, the delegation chain, how the money reaches a case, the purchases it is steered away from, and the annual report that sets the following year up.

Grant financing, loans and guaranties

The statutory twelve year repayment period and five percent interest floor, the annual proviso that turns credit into grant, and why loan guaranties need their own legislation.

Where Foreign Military Financing may be spent

The offshore procurement bar and its waiver, the content test that catches American companies, the flag rules on transport, and the ceiling on commercial contracts.

What non-repayable funding changes on a case

The pricing exception that applies only to a wholly non-repayable case, the repricing trap on amendments, and what the funding source does to offset recovery.

How Foreign Military Financing is appropriated and notified

The annual appropriation and what its provisos permit, the February estimate to Congress, the separate notification for financed cases above $100 million, and how to read the figures.

Key terms in this topic

FMF Direct credit Term of sale Section 25 report Direct loan Non-repayable FMF Guaranty Subsidy cost Federal Financing Bank Offshore procurement Content test Table C9.T8 Table C9.T10 DCC Nonrecurring cost Pricing benefits Repricing Offset recovery Appropriation Proviso Cash flow financing notification Countersignature