When the Applicant leases equipment, FEMA provides Public Assistance funding based on the terms of the lease. Leasing costs may be eligible if:

• The Applicant performed an analysis of the cost of leasing versus purchasing the equipment; and
• The total leasing costs do not exceed the cost of purchasing and maintaining equipment during the life of the eligible project.

If the leasing costs exceed the cost of purchasing and maintaining the equipment, FEMA determines the amount of eligible costs based on an evaluation of the reasonableness of the costs claimed, including whether the Applicant acted with prudence under the circumstances at the time it leased the equipment.

If the Applicant has a lease-purchase agreement and obtains ownership during completion of eligible work, FEMA provides Public Assistance funding for the equipment use based on the hourly equipment rate.

If the Applicant has a lease-purchase agreement and completes the eligible work prior to obtaining ownership, FEMA provides Public Assistance funding based on the cost to lease the equipment.