"Using the National Development Fund is authorized if no other sources are available," Ayatollah Ali Khamenei said in a letter to President Hassan Rouhani read out on Monday on state television.
The flooding, which began on March 19, has killed 76 people and forced more than 220,000 people into emergency shelters.
But at home the real message of having the IRGC fight floods is to show the people that the IRGC is relevant.
Floods have affected at least 23 out of Iran’s 31 provinces since heavy downpours began on March 19.
Iranian Foreign Minister Mohammad Javad Zarif said in a tweet that US sanctions were "impeding aid efforts by #IranianRedCrescent to all communities devastated by unprecedented floods."
The extent of the crises in Iran took days to reach Iranian media, likely because of government attempts to censure some of the disaster.
More than 500 houses were destroyed.
Rouhani’s hardline rivals have accused the government of doing too little, too late.
With the IRGC now leading efforts to deal with the flood’s aftermath, the national emergency has illustrated cleavages in the government’s ability to respond to a natural disaster.
The floods illustrate the failure of Iran’s civilian authorities to handle natural disasters and the competition between military, local government and the IRGC.