Fair Market Rent (FMR) is the benchmark that determines how much rental assistance HUD provides through programs like Section 8. It represents the rent, including utilities, that would be needed to obtain privately owned, modest rental housing in a given area.
How FMR Is Calculated
- Data: HUD relies primarily on data from the American Community Survey (ACS) conducted by the U.S. Census Bureau.
- 40th Percentile Standard: For each metropolitan area and county, HUD arranges all reported rents from lowest to highest and picks the rent at the 40th percentile—the point below which 40% of rents fall.
- Adjustments: HUD then adjusts that figure for recent market trends using more current data (like local listings) and caps year-to-year increases. Utilities allowances are also factored in based on cost surveys.
- Bedroom Size: Separate FMRs are set for efficiency, one, two, three, and four-bedroom units to reflect typical household needs.
What Is Its Impact?
- Voucher Payment Standards: Public Housing Authorities (PHAs) set their payment standards near the FMR. Families in the Housing Choice Voucher program pay 30% of their income toward rent; HUD covers the rest up to the payment standard.
- Landlord Participation: If FMRs are set too low, few units qualify, and voucher holders struggle to find housing. If too high, PHAs overspend their budgets.
- Market Influence: Because FMRs reflect local rents, they can indirectly push rents up in tight markets—landlords know voucher holders have more purchasing power.
- Policy & Planning: FMRs guide not only HUD’s rental assistance but also fair-market determinations in tax credit programs, LIHTC allocation, and nonprofit housing development.
Where to Find Your Area’s FMR
Visit HUD’s FMR Lookup: https://www.huduser.gov/portal/datasets/fmr.html to enter your county or metro area and see the current FMRs for each unit size. Good luck navigating your local rental market!
Section 8 + Housing Assist 
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