An April 17 fire at a fertilizer distribution facility in West, a town about 70 mile south of Dallas, caused two explosions that killed 15 people and damaged or destroyed homes and businesses within 37 blocks. The blast was felt 50 miles way and registered as a magnitude-2.1 earthquake.
The reversal of the decision by the Federal Emergency Management Agency allows federal money to cover the majority of the costs to rebuild three schools, roads and the town's water system, The Dallas Morning News reported Saturday.
The change of heart had been requested by Gov. Rick Perry and both Republicans and Democrats in the state's congressional delegation.
"This [federal aid], along with the disaster relief funding provided by the Texas Legislature, will help this community rebuild their infrastructure, school district and public works as quickly as possible," Perry said in a statement.
Shortly after the explosion, Obama approved federal funds for some of the town's residents. FEMA said it would not provide any additional funds because it believed Texas could afford the estimated $17.5 million in rebuilding costs insurance didn't cover.
The Texas Legislature allocated only $10 million for West's recovery.
Perry appealed FEMA's decision, saying the town's school district still needed $55 million for rebuilding.