Framework / Defense finance
Foreign Military Financing (FMF)
US government grant aid that funds allied defense procurement, including Israel's.
Foreign Military Financing (FMF) is the US program that provides grants and loans to allied governments to purchase American-made defense equipment and services. Israel is the largest cumulative recipient; under the 2016 US–Israel Memorandum of Understanding, Washington committed $38 billion over ten years (2019–2028), most of it FMF. A defining feature has been the historical allowance for Israel to spend a portion of FMF on its own domestic defense industry — a carve-out being phased out toward the 2028 "FMF cliff," after which funds must be spent entirely in the United States. FMF is foundational to the economics of the Israeli defense sector.