FEMA had denied a request last month by California Governor Jerry Brown for assistance.
FEMA said then that the severity of the damage caused by the fire did not exceed the capabilities of the state and local governments.
The funding is to supplement state and local recovery efforts in the area affected from August 17 to October 24.
State and local governments and some private nonprofit organizations may qualify for reimbursement of money spent on emergency response and repair or replacement of facilities damaged by the fire.
Federal funding is also available for hazard mitigation measures statewide.
FEMA says more money may be approved at a later date if the state requests it and further damage assessments determine it is warranted.