FEMA Public Assistance · Reform hubStatus as of November 15, 2026

How FEMA Public Assistance Funding Is Changing

Public Assistance is moving from project-by-project reimbursement of actual costs toward fixed estimates, state-led delivery and, possibly, formula-based block grants. Some of that is already in effect. The biggest pieces still need Congress. This page sorts out which is which and what local governments should do now.

In effectUse it nowSmall-project fixed estimates, Section 428 fixed-cost grants, and Applicant-Managed PA for disasters declared on or after September 1, 2026.

PilotWatch itSPEED PA in Indiana (DR-4933): FEMA-validated estimates set project costs, with advances available once projects are approved.

ProposedPlan for itRAPID formula grants (FEMA Review Council) and the FEMA Act of 2025 (H.R. 4669) Section 409 grants and Small Disaster Block Grants. Both require legislation.

1The path: from reimbursement to fixed funding

Each step below shifts more of the cost risk, and more of the paperwork, from FEMA to the state and the applicant. The common thread is that the estimate, not the final invoice, increasingly sets the funding.

1
Project-by-project reimbursement In effect
The traditional model under Stafford Act Sections 403, 406 and 407. FEMA and the applicant develop a project for each damaged site. Large projects are trued up to documented actual costs at closeout.
Final reconciliation and closeout →
2
Small projects funded on the estimate In effect
Under Section 422 Simplified Procedures, projects below the small project maximum are paid on the obligated estimate and are not adjusted to actual costs. For disasters declared on or after October 1, 2026, the maximum is $1,130,900. The only route to more money is a Net Small Project Overrun appeal.
Small projects and fixed costs →
3
Section 428 fixed-cost grants In effect
Alternative Procedures let applicants accept a fixed, capped grant for large permanent work based on an agreed estimate. The applicant carries any overrun. Savings may be used for cost-effective risk reduction or to improve future Public Assistance operations. This is the working prototype for most reform proposals.
PAPPG Appendix G → · Section 428: the model for block grants and RAPID →
4
Applicant-managed and state-led delivery In effect Pilot
For disasters declared on or after September 1, 2026, FEMA no longer assigns every applicant a Program Delivery Manager. The answer on the Request for Public Assistance routes projects to a FEMA PDMG, a recipient-led PDMG, or Applicant-Managed delivery. Eligibility and documentation rules are unchanged. In Indiana, the SPEED PA pilot adds FEMA-validated estimates and advance funding.
Applicant-Managed PA and cost estimating → · Cost estimate validation →
5
Estimate-based grants and small-disaster block grants Proposed
The FEMA Act of 2025 (H.R. 4669) would replace Section 406 with a new Section 409. Permanent work grants would be set from licensed-professional estimates presumed accurate, with a 65% to 85% federal share. Section 106 would let states take a lump-sum block grant for smaller disasters. Approved by House committee in September 2025; not yet passed by the House.
H.R. 4669 PA reforms → · Section 409 direct funding →
6
RAPID formula grants to states Proposed
The FEMA Review Council's May 2026 report recommends replacing Public Assistance with RAPID. A single payment would go to the state within 30 days of a declaration, sized by a parametric formula such as wind speed or flood depth. States would certify eligibility and run audits. The federal share would start at 50%. Requires legislation. (Not to be confused with FEMA's existing RAPID cost-estimating process, Rapid Assessment with Public Infrastructure Data.)
RAPID explained → · Parametric funding mechanism →

2Compare the models

Model	Status	What sets the funding	Who runs it	Who carries overruns	Federal share	Authority
Standard large projects	In effect	Documented actual costs, trued up at closeout	FEMA, with the state as recipient	FEMA, if costs are eligible and documented	At least 75%	Stafford Act §§403, 406, 407
Small projects	In effect	Obligated estimate up to $1,130,900	FEMA and recipient	Applicant, unless a net overrun appeal succeeds	At least 75%	§422; FP-104-23-001
Section 428 fixed-cost	In effect	Agreed, validated fixed estimate	Applicant, with recipient oversight	Applicant	At least 75%	§428; PAPPG Appendix G
Applicant-Managed / SPEED PA	In effect Pilot	Same PA rules; SPEED PA accepts FEMA-validated estimates	Applicant or recipient leads project development	Unchanged from the underlying project type	At least 75%	Existing PA authorities; FEMA guidance
Section 409 grants	Proposed	Licensed-professional estimate, presumed accurate	FEMA review, 90 days; funds within 30 days	Applicant, after one allowed adjustment	65% to 85%	H.R. 4669 §101
Small Disaster Block Grant	Proposed	80% of the estimated federal share, as a lump sum	Governor or tribal executive	State	80% of the declaration share	H.R. 4669 §106
RAPID	Proposed	Parametric formula based on hazard and population	State certifies eligibility and audits	State and its subrecipients	50%, rising to 75% on performance	Needs new legislation

Proposed figures come from the bill text and the Review Council report as summarized by the sources below. They will change if Congress amends or enacts them.

3What it means for local governments

Shift 1

The estimate becomes the ceiling

Under fixed-cost models, a low or incomplete estimate is a permanent loss. Scope, unit costs, contingency and escalation have to be right the first time.

When the estimate becomes the ceiling →

Shift 2

Documentation moves to the front

Applicant-Managed PA and SPEED PA expect complete damage, cost, procurement and insurance records up front. Without a FEMA PDMG, the applicant builds the case.

Are you ready to go applicant-managed? →

Shift 3

The state becomes the gatekeeper

Under block grants and RAPID, local governments would be subrecipients of state-run programs, with state eligibility rules, state audits and no federal backstop for overruns.

State disaster assistance programs →

Shift 4

Insurance and asset data matter more

RAPID would tie future federal shares to insurance compliance, and parametric funding rewards knowing what you own and what it costs to replace.

Smart Asset Registry →

Shift 5

Fewer federal declarations

The Review Council also recommends higher per capita indicators and a minimum state spending requirement, which would leave more moderate disasters to states and localities.

Review Council report summary →

Shift 6

Cash flow becomes the risk

Faster funding helps, but the applicant still has to carry costs, manage overruns and meet audit deadlines. Reserves and short-term financing matter more.

PA transition readiness →

4Do this now

These steps pay off under today's rules and under every proposal on the table.

Build estimating capacity. Know the Appendix L standards and the Cost Estimating Format, and keep local historical unit costs.
Decide your RPA path before the next disaster. Choose FEMA PDMG, recipient-led or Applicant-Managed delivery with eyes open.
Keep an asset inventory with replacement values. It supports estimates, insurance and any formula-based allocation.
Review insurance coverage. Close gaps that would reduce assistance or future federal shares.
Get procurement and documentation audit-ready. Fixed funding does not relax 2 CFR 200 or recordkeeping rules.
Plan cash flow and reserves. Model what a 50% to 65% federal share would mean for your budget.
Learn your state's program. Find out how your state would run block grants or RAPID and what it would require of subrecipients.
Consider Section 428 on your next large project. It is the closest live test of fixed-cost funding.

Take the FEMA reform readiness check →

5Go deeper on GovStar

In effect today

Current rules

Fixed-cost funding

Section 428 and estimating

Proposed

Reform proposals

6Watch list

Congress

Legislation

House floor action on the FEMA Act of 2025 (H.R. 4669), and any amendments that add RAPID-style formula funding.
Any bill authorizing RAPID, which would amend the Stafford Act and replace Public Assistance.
Changes to the federal cost share and to management-cost funding for block grants.

FEMA

Administrative action

Whether SPEED PA expands beyond Indiana's DR-4933.
Updates to the Applicant-Managed PA Quick Guide and the next PAPPG version.
Any rule raising the per capita indicator or adding a minimum state expenditure.
The annual small project maximum notice, which takes effect each October 1.

7Sources

GovStar is an independent Public Assistance resource and is not affiliated with FEMA. This page summarizes public information as of November 15, 2026. It is not legal advice. Proposals described here may change or never take effect; rely on the Stafford Act, 44 CFR, the PAPPG and your FEMA and state contacts.