Fair Market Rent
HUD's estimate of the rent (including utilities) for a modest unit in a given metropolitan area, updated annually. The baseline for Housing Choice Voucher payment standards. Defined at 24 CFR § 888.113.
Also known as: FMR, 40th percentile rent
Definition
Fair Market Rents (FMRs) are dollar amounts determined by HUD to represent the cost of housing that meets minimum standards of decency, safety, and sanitation in a local housing market, as defined at 24 CFR § 888.113.
Statutory Authority
Fair Market Rents are established pursuant to 42 U.S.C. § 1437f(c)(1), which directs HUD to publish FMRs "periodically, but not less than annually." HUD's implementing regulations are at 24 CFR Part 888, Subpart A.
Calculation Methodology
Per 24 CFR § 888.113(a), FMRs are the 40th percentile rent of standard-quality units occupied by recent movers in each FMR area. HUD uses American Community Survey (ACS) data supplemented by:
- Local surveys in areas with insufficient ACS sample sizes
- Small Area FMRs (SAFMRs) in designated metropolitan areas, set at the ZIP-code level rather than the metropolitan area level
Role in Housing Assistance Programs
FMRs serve as the benchmark for:
- Housing Choice Vouchers: Public Housing Authorities (PHAs) set Payment Standards between 90% and 110% of the applicable FMR (24 CFR § 982.503)
- Project-Based Rental Assistance: Rents for assisted units may not exceed applicable FMRs (24 CFR § 880.609)
- HOME Investment Partnerships: Maximum per-unit subsidies are indexed to FMR levels
Annual Update Process
HUD publishes proposed FMRs in the Federal Register each spring and finalizes them for the upcoming fiscal year (beginning October 1). PHAs and other interested parties may comment on proposed FMRs and request re-surveys of their market areas.
Sources
- 24 CFR § 888.113, eCFR —
ecfr - 42 U.S.C. § 1437f(c)(1), Cornell LII —
cornell-lii - HUD.gov: Fair Market Rents —
hud-gov
Frequently asked questions
Statutory Authority
Fair Market Rents are established pursuant to 42 U.S.C. § 1437f(c)(1), which directs HUD to publish FMRs "periodically, but not less than annually." HUD's implementing regulations are at 24 CFR Part 888, Subpart A.
Calculation Methodology
Per 24 CFR § 888.113(a), FMRs are the 40th percentile rent of standard-quality units occupied by recent movers in each FMR area. HUD uses American Community Survey (ACS) data supplemented by: Local surveys in areas with insufficient ACS sample sizes Small Area FMRs (SAFMRs) in designated metropolitan areas, set at the ZIP-code level rather than the metropolitan area level
Role in Housing Assistance Programs
FMRs serve as the benchmark for: Housing Choice Vouchers: Public Housing Authorities (PHAs) set Payment Standards between 90% and 110% of the applicable FMR (24 CFR § 982.503) Project-Based Rental Assistance: Rents for assisted units may not exceed applicable FMRs (24 CFR § 880.609) HOME Investment Partnerships: Maximum per-unit subsidies are indexed to FMR levels
Annual Update Process
HUD publishes proposed FMRs in the Federal Register each spring and finalizes them for the upcoming fiscal year (beginning October 1). PHAs and other interested parties may comment on proposed FMRs and request re-surveys of their market areas.
Sources
CFR § 888.113, eCFR — ecfr U.S.C. § 1437f(c)(1), Cornell LII — cornell-lii HUD.gov: Fair Market Rents — hud-gov