Notice2026-17891
Fair Market Rents for the Housing Choice Voucher Program, Moderate Rehabilitation Single Room Occupancy Program, and Other Programs, Fiscal Year 2027
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
September 1, 2026
Issuing agencies
Housing and Urban Development Department
Abstract
HUD is required to publish FMRs not less than annually, adjusted to be effective on October 1 of each year. This notice describes the methods used to calculate the FY 2027 FMRs and lists the procedures for public housing agencies (PHAs) to request reevaluations of their FMRs as required by the Housing Opportunity Through Modernization Act of 2016 (HOTMA).
Full Text
<html>
<head>
<title>Federal Register, Volume 91 Issue 168 (Tuesday, September 1, 2026)</title>
</head>
<body><pre>
[Federal Register Volume 91, Number 168 (Tuesday, September 1, 2026)]
[Notices]
[Pages 56156-56162]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-17891]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-6553-N-03]
Fair Market Rents for the Housing Choice Voucher Program,
Moderate Rehabilitation Single Room Occupancy Program, and Other
Programs, Fiscal Year 2027
AGENCY: Office of the Assistant Secretary for Policy Development and
Research, Department of Housing and Urban Development, HUD.
ACTION: Notice of fiscal year (FY) 2027 fair market rents (FMRs).
-----------------------------------------------------------------------
SUMMARY: HUD is required to publish FMRs not less than annually,
adjusted to be effective on October 1 of each year. This notice
describes the methods used to calculate the FY 2027 FMRs and lists the
procedures for public housing agencies (PHAs) to request reevaluations
of their FMRs as required by the Housing Opportunity Through
Modernization Act of 2016 (HOTMA).
DATES: Comment Due Date: October 1, 2026.
Effective Date of FY 2027 FMRs: October 1, 2026, unless HUD
receives a valid request for reevaluation of specific area FMRs as
described below.
ADDRESSES: HUD invites interested persons to submit comments regarding
the FMRs and to request reevaluation of the FY 2027 FMRs.
Communications must refer to the above docket number and title and
should contain the information specified in the ``Request for Public
Comments and FMR Reevaluations'' section. There are two methods for
submitting public comments or reevaluation requests:
1. Electronic Submission of Comments. Interested persons may submit
comments or reevaluation requests electronically through the Federal
eRulemaking Portal at <a href="https://www.regulations.gov">https://www.regulations.gov</a>. HUD strongly
encourages commenters to submit comments or reevaluation requests
electronically. Electronic submission of comments or reevaluation
requests allows the author maximum time to prepare and submit a comment
or reevaluation request, ensures timely receipt by HUD, and enables HUD
to make them immediately available to the public. Comments submitted
electronically through the <a href="https://www.regulations.gov">https://www.regulations.gov</a> website can be
viewed by other submitters and interested members of the public.
Commenters or reevaluation requestors should follow the instructions
provided on that site to submit comments or reevaluation requests
electronically.
2. Submission of Comments by Mail. Members of the public may submit
comments or requests for reevaluation by mail to the Regulations
Division, Office of General Counsel, Department of Housing and Urban
Development, 451 7th Street SW, Room 10276, Washington, DC 20410-0500.
Note: To receive consideration as public comments or
reevaluation requests, comments or requests must be submitted
through one of the two methods specified above. Again, all
submissions must refer to the docket number and title of the notice.
No Facsimile Comments or Reevaluation Requests. HUD does not accept
facsimile (FAX) comments or requests for FMR reevaluation.
FOR FURTHER INFORMATION CONTACT: Adam Bibler, Office of Policy
Development and Research, U.S. Department of Housing and Urban
Development, 451 7th Street SW, Washington, DC 20410, telephone (202)
402-6057 (this is not a toll-free number).
For technical information on the methodology used to develop FMRs
or a listing of all FMRs, please call the HUD User information line at
800-245-2691 or access the information on the HUD User website at
<a href="https://www.huduser.gov/portal/datasets/fmr.html">https://www.huduser.gov/portal/datasets/fmr.html</a>. HUD welcomes and is
prepared to receive calls from individuals who are deaf or hard of
hearing, as well as from individuals with speech or communication
disabilities. To learn more about how to make an accessible telephone
call, please visit <a href="https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs">https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs</a>.
Questions related to the use of FMRs or voucher payment standards
should be directed to the respective local HUD program staff or the
Office of Public and Indian Housing Customer Service Center at <a href="https://www.hud.gov/contactus/css">https://www.hud.gov/contactus/css</a>. Questions on how to conduct FMR surveys may
be addressed to the electronic mailbox for the Program Parameters and
Research Division at <a href="/cdn-cgi/l/email-protection#4434343620042c31206a232b32"><span class="__cf_email__" data-cfemail="fa8a8a889eba928f9ed49d958c">[email protected]</span></a>.
Electronic Data Availability. This Federal Register notice will be
available electronically from the HUD User page at <a href="https://www.huduser.gov/portal/datasets/fmr.html">https://www.huduser.gov/portal/datasets/fmr.html</a>. Federal Register notices also
are available electronically from <a href="https://www.federalregister.gov/">https://www.federalregister.gov/</a>, the
U.S. Government Printing Office website. Complete documentation of the
methodology and data used to compute each area's FY 2027 FMRs is
available at <a href="https://www.huduser.gov/portal/datasets/fmr.html#2027_query">https://www.huduser.gov/portal/datasets/fmr.html#2027_query</a>. FY 2027 FMRs are available in a variety of
electronic formats at <a href="https://www.huduser.gov/portal/datasets/fmr.html">https://www.huduser.gov/portal/datasets/fmr.html</a>,
including in PDF and Microsoft Excel. Small Area FMRs for all
metropolitan and non-metropolitan areas are also available in
electronic format at: <a href="https://www.huduser.gov/portal/datasets/fmr/smallarea/index.html">https://www.huduser.gov/portal/datasets/fmr/smallarea/index.html</a>. For informational purposes, HUD also publishes
50th percentile rents for all FMR areas at <a href="https://www.huduser.gov/portal/datasets/50per.html">https://www.huduser.gov/portal/datasets/50per.html</a>.
SUPPLEMENTARY INFORMATION:
I. Background
Section 8 of the USHA (42 U.S.C. 1437f) authorizes housing
assistance to
[[Page 56157]]
aid low-income families in renting safe and decent housing. Housing
assistance payments are limited by FMRs established by HUD for
different geographic areas. In the Housing Choice Voucher (HCV)
Program, the FMR is the basis for determining the ``payment standard''
used to calculate the maximum monthly subsidy for an assisted family.
See 24 CFR 982.503. In addition, the year-over-year FMR change is one
measure of rent inflation used to calculate the Renewal Funding
Inflation Factors that affect PHAs' HCV funding eligibility for the
calendar year. HUD also uses the FMRs to determine initial renewal
rents for some expiring project-based Section 8 contracts, initial
rents for housing assistance payment contracts in the Moderate
Rehabilitation Single Room Occupancy Program, rent ceilings for rental
units in both the HOME Investment Partnerships Program and the
Emergency Solution Grants Program, calculation of maximum award amounts
for Continuum of Care recipients and the maximum amount of rent a
recipient may pay for property leased with Continuum of Care funds, and
calculation of flat rents in public housing units. The FMR is also used
to determine the Performance-Based Contract Administration Fee in
Multifamily Housing. In general, the FMR for an area is the amount that
a tenant would need to pay the gross rent (shelter rent plus utilities)
of privately owned, decent, and safe rental housing of a modest (non-
luxury) nature with suitable amenities. HUD's FMR calculations
represent HUD's best effort to estimate the 40th percentile gross rent
paid by recent movers into standard quality units in each FMR area.
On August 22, 2025, HUD published a Notice of Fiscal Year (FY) 2026
Fair Market Rents (FMRs) that included Notice of Proposed Material
Changes for FY 2027 FMRs (90 FR 41096). For FY 2027 FMRs, HUD is
implementing the proposed change described in that notice. The change
affects how HUD calculates the utility portion of the gross rent
inflation factors and trend factor forecasts. As described in the FY
2026 notice, HUD is adopting this change following the decision by the
Bureau of Labor Statistics to discontinue publication of the local
housing fuels and utilities Consumer Price Index, which HUD formerly
used in the gross rent inflation factor. The methodology used to
calculate the gross rent inflation factors and trend factor forecasts
is discussed in section III, subsections E and F below.
II. Publication of FMRs
Section 8(c)(1) of the USHA,\1\ as amended by HOTMA (Pub. L. 114-
201, enacted July 29, 2016), requires the Secretary of HUD to publish
FMRs not less than annually. Section 8(c)(1)(A) states that each FMR
``shall be adjusted to be effective on October 1 of each year to
reflect changes, based on the most recent available data trended so the
rentals will be current for the year to which they apply''. Section
8(c)(1)(B) requires that HUD publish, not less than annually, new FMRs
on the World Wide Web or in any other manner specified by the
Secretary, and that HUD must also notify the public of when it
publishes FMRs by Federal Register notice. After notification, the FMRs
``shall become effective no earlier than 30 days after the date of such
publication,'' and HUD must provide a procedure for the public to
comment and request a reevaluation of the FMRs in a jurisdiction before
the FMRs become effective. Consistent with the statute, HUD is issuing
this notice to notify the public that FY 2027 FMRs are available at
<a href="https://www.huduser.gov/portal/datasets/fmr.html">https://www.huduser.gov/portal/datasets/fmr.html</a> and will become
effective on October 1, 2026. This notice also provides procedures for
FMR reevaluation requests.
---------------------------------------------------------------------------
\1\ 42 U.S.C. 1437f.
---------------------------------------------------------------------------
III. FMR Methodology
This section provides a brief overview of how HUD computed the FY
2027 FMRs.
For complete information on how HUD derives each area's FMRs, see
the online documentation at <a href="https://www.huduser.gov/portal/datasets/fmr.html#2027_query">https://www.huduser.gov/portal/datasets/fmr.html#2027_query</a>.
A. Geographic Area Definitions
The FY 2027 FMRs are based on the updated metropolitan statistical
area (MSA) definitions published by the Office of Management and Budget
(OMB) on July 21, 2023, and first adopted by HUD for FMRs in FY 2026.
However, in many cases, HUD has split metropolitan statistical areas
into smaller subareas, which HUD designates as ``HUD Metropolitan Fair
Market Rent Areas (HMFAs).'' This is meant to minimize volatility in
the year-to-year change in FMRs based on geographic revisions, and to
tailor FMRs to local housing markets. For more information on how HUD
determines HMFAs, see the FY 2026 FMR Federal Register notice (90 FR
41096) or HUD's online FMR methodology documentation.
B. Base Year Rents
For FY 2027 FMRs, HUD uses the U.S. Census Bureau's 5-year ACS data
collected between 2020 and 2024 as the ``base rents'' for the FMR
calculations. These data are the most current ACS data available at the
time that HUD calculates the FY 2027 FMRs. To evaluate the statistical
reliability of the ACS data used in the FMR calculations, HUD pairs a
``margin of error'' test \2\ with an additional requirement based on
the number of survey observations supporting the estimate. The Census
Bureau does not provide HUD with an exact count of the number of
observations supporting the ACS estimate; rather, the Bureau provides
HUD with categories of the number of survey responses underlying the
estimate, including whether the estimate is based on more than 100
observations. Using these categories, HUD requires that, in addition to
meeting the ``margin of error'' test, ACS rent estimates must be based
on at least 100 observations to be used as base rents.
---------------------------------------------------------------------------
\2\ HUD's margin of error test requires that the margin of error
of the ACS estimate is less than half the size of the estimate
itself.
---------------------------------------------------------------------------
For areas in which the 5-year ACS data for two-bedroom, standard
quality \3\ gross rents do not pass the statistical reliability tests
(i.e., have a margin of error ratio greater than 50 percent or fewer
than 100 observations), HUD uses an average of the 5-year ACS estimates
over the three most recent years \4\ (provided that there is data
available for at least two of these years),\5\ or if such data are not
available, using the two-bedroom rent data within the next largest
geographic area. For a metropolitan subarea, the next largest area is
its containing metropolitan area. For a non-metropolitan area, the next
largest area is the State non-metropolitan portion.
---------------------------------------------------------------------------
\3\ The definition of a standard quality unit is one with
complete plumbing and kitchen facilities; meals not included in
rent; and situated on ten acres or less of land. HUD no longer
excludes new construction units from the standard quality universe
pursuant to the amended regulations at 24 CFR 888.113.
\4\ For FY 2027, the 3 years of ACS data in question are 2022,
2023 and 2024. HUD adjusts the 2022 and 2023 data to be denominated
in 2024 dollars using the growth in Consumer Price Index (CPI)-based
gross rents measured between those years and 2024.
\5\ To be used in the 3-year average calculation, the 5-year
estimates must be minimally statistically qualified; that is, the
margin of error of the estimates must be less than half the size of
the estimate.
---------------------------------------------------------------------------
C. Recent-Mover Factors
Following the assignment of the standard quality two-bedroom rent
described above, HUD applies a recent-
[[Page 56158]]
mover factor to these rents. HUD calculates the recent-mover factor as
the change between the 5-year 2020-2024 standard quality two-bedroom
gross rent and the 1-year 2024 recent mover gross rent for the recent
mover factor area. HUD does not allow recent-mover factors to lower the
standard quality base rent; therefore, if the 5-year standard quality
rent is larger than the comparable 1-year recent mover rent, HUD sets
the recent-mover factor to 1. When the recent-mover factor is greater
than one and calculated for the same geographic area as the base rent,
HUD is, in effect, replacing the base rent with the recent-mover rent
for that area.
In determining the recent mover factor, HUD first considers the
rents of households who moved into their unit only in the current ACS
year. For ACS 2024, this means that the maximum length of time for a
household to have lived in its current unit and still be considered a
recent mover under this definition would be 11 months. HUD applies the
same two statistical reliability checks to each ACS recent mover
estimate as it does for the base rent estimate. First, the estimate
must be supported by at least 100 sample cases from the ACS. Second,
the estimate must have a margin of error that is smaller than half the
estimate itself. HUD first considers the estimate for two-bedroom
units, then for units of all bedroom counts. For areas without an ACS
estimate meeting these criteria, HUD next checks the estimate tabulated
from two-year recent movers. If the local two-year recent mover
estimates are not reliable, HUD considers the estimates for
increasingly larger areas of geography.
D. Other Rent Survey Data
HUD calculates base rents for the territorial island areas not
covered by the ACS using data collected during the 2020 decennial
census of American Samoa, Guam, the Northern Mariana Islands, and the
US Virgin Islands.\6\ HUD updates the 2020 base year data to 2024 using
the growth in national ACS data over that period.
---------------------------------------------------------------------------
\6\ The ACS is not conducted in the Pacific Islands (Guam,
Northern Mariana Islands and American Samoa) or the US Virgin
Islands. As part of the 2020 Decennial Census, the Census Bureau
conducted ``long-form'' sample surveys for these areas. HUD uses the
results gathered by this long form survey for the FY 2027 FMRs.
---------------------------------------------------------------------------
HUD does not use ACS data to establish the base rent or recent-
mover factor in cases where it has locally collected survey data which
are more recent than the 2024 ACS. For larger metropolitan areas that
have valid ACS 1-year recent-mover data, survey data may not be any
older than the midpoint of the calendar year for the ACS 1-year data.
Since the ACS 1-year data used for the FY 2027 FMRs is from 2024, in
larger areas with valid 1-year recent mover data HUD does not use other
survey data collected before June 30, 2024. In areas without
statistically reliable 1-year ACS data, HUD continues to use local
survey data until the mid-point of the 5-year ACS data is more recent
than the local survey, which is June 30, 2022 for the 2024 5-year ACS.
For FY 2027 FMRs, the following are MSAs, HUD Metro FMR Areas, or non-
metropolitan counties that have FMRs based on local ad hoc surveys:
(1) HUD uses survey data from 2022 to calculate the FMRs for Hawaii
County, HI; Hood River County, OR; and Wasco County, OR.
(2) HUD uses survey data from 2024 for Boston-Cambridge-Quincy, MA-
NH HUD Metro FMR Area; New York, NY HUD Metro FMR Area; Santa Maria-
Santa Barbara, CA MSA; Santa Rosa, CA MSA; and all areas in the State
of Montana.
(3) HUD uses survey data from 2025 for Albany, OR MSA; Asheville,
NC HUD Metro FMR Area; Corvallis, OR MSA; Kahului-Wailuku-Lahaina, HI
HUD Metro FMR Area; Los Angeles-Long Beach-Glendale, CA HUD Metro FMR
Area; Napa, CA MSA; San Luis Obispo-Paso Robles-Arroyo Grande, CA MSA;
and Transylvania County, NC.
(4) HUD uses survey data from 2026 for San Benito County, CA HUD
Metro FMR Area and Santa Cruz-Watsonville, CA MSA.
E. Gross Rent Inflation Factors
The ACS recent mover rent estimates as described above produce a
rent value that is ``as of'' 2024. To account for inflation, HUD
adjusts this value using a gross rent inflation factor that captures
rent growth from 2024 to 2025. This gross rent inflation factor itself
consists of two components: a shelter rent inflation factor and a
utility inflation factor.
1. Shelter Rent Inflation Factors
HUD calculates two measures of shelter rent inflation: one based on
the year-to-year change in rent as measured by private data providers,
and one based on the year-to-year change in rent as measured by the
Consumer Price Index (CPI) rent of primary residence series. HUD uses
both private data and the CPI in an attempt to fully and accurately
measure recent mover rent inflation. Research has shown that private
data often provide a timelier measure of recent mover rent inflation
than the CPI, which is constructed by measuring the rents of both in-
place and new tenants. However, the CPI provides other advantages as a
measure of rent inflation, such as consisting of a representative
sample of all housing units, measuring rent in the same units over time
(a ``repeat rent'' sample), and adjusting for the aging of units.
The private measures of rent used by HUD are the Apartment List
Rent Estimate of median rent, CoStar Group average effective rent,
Cotality, Inc., single-family combined three-bedroom median rent,
Moody's average market rent, RealPage average effective rent per unit,
and Zillow Observed Rent Index. In calculating a measure of inflation
from these data, HUD first takes the annual average of each statistic,
then its year-to-year change. HUD then takes the mean of the changes
from all available sources for each area. HUD uses a local measure of
private rent inflation for markets that are covered by at least three
of the six available sources of private rent data. For markets that are
not covered by at least three sources, HUD uses the rental unit-
weighted regional average of private inflation factors for the Census
region in which the area is located. This ensures the rent inflation
factor for smaller areas not covered directly by private sources still
take into account current rental market conditions. Similarly, HUD uses
the local metropolitan area CPI rent of primary residence for the 23
areas where such data exist, or the regional CPI rent in areas without
a local index.
2. Utility Inflation Factors
In order to produce a gross rent inflation factor, HUD combines
these year-to-year change in rent with the change in utility costs.
Newly for FY 2027, HUD uses a weighted average composite of four
household fuel and utility components (electricity, natural gas, fuel
oil, and water/sewer/trash) to produce a utility inflation factor. This
utility inflation factor is designed to replicate the CPI-based utility
index for each of the 23 self-representing Primary Sampling Units
(PSUs) in the CPI sample, as well as the four Class B/C Census regions.
The weighted average composite uses State-level data from the U.S.
Energy Information Administration (EIA) surveys for residential
electricity, natural gas, and fuel oil prices, along with national-
level data on changes in residential water, sewer, and trash collection
costs from the BLS.
Because EIA data is primarily available at the State level, HUD
assigns State-level prices to each PSU based on the State in which the
PSU is located. For PSUs that span multiple States,
[[Page 56159]]
HUD assigns a utility price based on a population-weighted average of
the relevant State-level utility prices, using the population of each
county within the PSU as weights. For example, the Washington-
Arlington-Alexandria, DC-VA-MD-WV PSU spans three States and the
District of Columbia and includes 25 counties; HUD calculates a
weighted average utility price for each component using aggregated
county population data from these States and the District of Columbia.
Similarly, for the Class B/C Census regions, HUD computes a population-
weighted average utility price across all non-self-representing PSU
areas, consistent with the BLS approach to constructing the regional
CPI for Class B/C areas.
Once each PSU and Census region is assigned utility prices, HUD
calculates the year-over-year change in each of the four utility
components. HUD then produces composite utility inflation factors using
national CPI-U relative importance weights from the household fuels and
utilities (SAH2) series. The final composite utility inflation factors
are also used for the trend factor forecasts as described in section
III, subsection F.
3. Gross Rent Inflation Factors
HUD then combines these utility inflation factors with the private
and CPI shelter rent inflation factors by taking a weighted average of
the two, using the utility share of gross rent expenditures from the
ACS as weights. This produces two gross rent inflation factors, one
based on the private shelter rent measure and one based on the CPI
measure. Next, HUD takes an average of these two measures, where the
private-sector factor is weighted at approximately 55 percent and the
CPI rent inflation measure is weighted at approximately 45 percent. HUD
has determined and updated these weights by comparing the national
average of the private rent changes and changes in CPI rent of primary
residence to changes in the national average of recent mover rents from
the ACS from 2018 through 2024. HUD weights the private data averages
and overall CPI rent of primary residence in such a way as to minimize
the root mean squared error between the resulting average and the ACS
recent mover rents. For future FMRs, HUD will continue to update the
weights by adding the most recent years of ACS recent mover rents,
private rent data, and CPI rent of primary residence to the analysis.
HUD multiplies this overall gross rent inflation factor by the
recent mover rent, and the resulting estimates are ``as of'' 2025.
F. Trend Factor Forecasts
Following the application of the local or regional gross rent
inflation factor, HUD trends the gross rent estimate from 2025 to FY
2027 using a trend factor which is based on local or regional forecasts
of CPI gross rent data. HUD derived a trend factor for each Class A CPI
area and Class B/C CPI region using time series models based on
national inputs (National Input Model or NIM), local inputs (Local
Input Model or LIM), and historical values of the predicted series
(Pure Time Series--PTS). Starting in FY 2027, these trend factors
include the composite utility inflation factors described in Section
III, subsection E above. HUD chose the actual model used for each CPI
area's trend factor based on which model generates the lowest Root Mean
Square Error (RMSE) statistic and applied the trend factors to the
corresponding FMR areas. HUD established the type of model for each
forecast (NIM, LIM, or PTS) for the FY 2020 FMRs. HUD had previously
stated it would reassess the model selections during the calculation of
the FY 2025 FMRs. However, due to the high degree of volatility that
occurred in rental markets from 2020-2024, HUD believes that evaluating
model performance during this period will not result in the best long
term model selection and, therefore, did not reevaluate for the FY 2027
FMRs. More details on the trend factor forecasts are available in the
June 5, 2019, Federal Register notice (84 FR 26141) and are available
at <a href="https://www.federalregister.gov/documents/2019/06/05/2019-11763/proposed-changes-to-the-methodology-used-for-estimating-fair-market-rents">https://www.federalregister.gov/documents/2019/06/05/2019-11763/proposed-changes-to-the-methodology-used-for-estimating-fair-market-rents</a>.
G. Bedroom Rent Adjustments
HUD uses two-bedroom units for its primary calculation of FMR
estimates. This is generally the most common size of rental unit and,
therefore, the most reliable to survey and analyze. After estimating
two-bedroom FMRs, HUD calculates bedroom ratios for each FMR area,
which relate the prices of smaller and larger units to the cost of two-
bedroom units. The bedroom ratios HUD uses in the calculation of FY
2027 FMRs are calculated from three 5-year ACS data series (2018-2022,
2019-2023, and 2020-2024). HUD only uses estimates with a margin of
error ratio of less than 50 percent. If an area does not have reliable
estimates in at least two of the previous three ACS releases, HUD uses
the bedroom ratios for the area's larger parent geography.
To ensure an adequate distributional fit in these bedroom ratio
calculations for individual FMR areas, HUD establishes bedroom interval
ranges which set upper and lower limits for bedroom ratios nationwide,
based on an analysis of the range of such intervals for all areas with
large enough samples to permit accurate bedroom ratio determinations.
In the calculation of FY 2027 FMR estimates, HUD sets the bedroom
interval ranges as follows: efficiency FMRs are constrained to fall
between approximately 0.70 and 0.88 of the two-bedroom FMR; one-bedroom
FMRs must be between 0.76 and 0.92 of the two-bedroom FMR; three-
bedroom FMRs (prior to the adjustments described below) must be between
1.10 and 1.27 of the two-bedroom FMR; and four-bedroom FMRs (again,
prior to adjustment) must be between 1.22 and 1.55 of the two-bedroom
FMR. Given that these interval ranges partially overlap across unit
bedroom counts, HUD further adjusts bedroom ratios for a given FMR
area, if necessary, to ensure that higher bedroom-count units have
higher rents than lower bedroom-count units within that area.
HUD further adjusts the rents for three-bedroom and larger units to
reflect HUD's policy to set higher rents for these units.\7\ This
adjustment is intended to increase the likelihood that the largest
families, who have the most difficulty in leasing units, will be
successful in finding eligible program units. The adjustment adds 8.7
percent to the unadjusted three-bedroom FMR estimates and adds 7.7
percent to the unadjusted four-bedroom FMR estimates.
---------------------------------------------------------------------------
\7\ As mentioned above, HUD applies the interval ranges for the
three-bedroom and four-bedroom FMR ratios prior to making these
adjustments. In other words, the adjusted three- and four-bedroom
FMRs can exceed the interval ranges but the unadjusted FMRs cannot.
---------------------------------------------------------------------------
HUD derives FMRs for units with more than four bedrooms by adding
15 percent to the four-bedroom FMR for each extra bedroom. For example,
the FMR for a five-bedroom unit is 1.15 times the four-bedroom FMR, and
the FMR for a six-bedroom unit is 1.30 times the four-bedroom FMR.
Similarly, HUD derives FMRs for single-room occupancy units by
subtracting 25 percent from the zero-bedroom FMR (i.e., they are set at
0.75 times the zero-bedroom [efficiency] FMR).\8\
---------------------------------------------------------------------------
\8\ As established in the interim rules implementing the
provisions of the Quality Housing and Work Responsibility Act of
1998 (Title V of the FY 1999 HUD Appropriations Act; Pub. L. 105-
276) in 24 CFR 982.604.
---------------------------------------------------------------------------
H. Minimum FMRs
All FMRs are subject to a minimum rent based on State or national
non-metropolitan area median rent. HUD calculates a population-weighted
[[Page 56160]]
median two-bedroom FMR across all non-metropolitan counties or county-
equivalents of each State, which, for the purposes of FMRs, is the
State minimum rent. HUD also calculates the population weighted median
FMR rent across all non-metropolitan areas of the country, which, for
the purposes of FMRs, is the national non-metropolitan rent. For FY
2027, the national non-metropolitan rent is $1,014. The applicable
minimum rent for a particular area is the lower of the State or
national non-metropolitan median. Each area's two-bedroom FMR must be
no less than the applicable minimum rent.
I. Limit on FMR Decreases
HUD's regulations at 24 CFR 888.113 include a limit on the amount
that FMRs may annually decrease. The current year's FMRs resulting from
the application of the bedroom ratios, as discussed in section (E)
above, may be no less than 90 percent of the prior year's FMRs for
units with the same number of bedrooms. Accordingly, if the current
year's FMRs are less than 90 percent of the prior year's FMRs as
calculated by the above methodology, HUD sets the current year's FMRs
equal to 90 percent of the prior year's FMRs. For areas where HUD has
required the use of Small Area FMRs in the administration of their
voucher programs, the FY 2027 Small Area FMRs may be no less than 90
percent of the FY 2026 Small Area FMRs. For all other metropolitan
areas, the FY 2027 Small Area FMRs may be no less than 90 percent of
the greater of the FY 2026 metropolitan area wide FMRs or the
applicable FY 2026 Small Area FMR.
PHAs operating in areas where the calculated FMR is lower than the
published FMR (i.e., those areas where HUD has limited the decrease in
the annual change in the FMR to 10 percent) may request payment
standards below the basic range (24 CFR 982.503(e)) and reference the
``unfloored'' rents (i.e., the unfinalized FMRs calculated by HUD prior
to application of the 10-percent-decrease limit) depicted in the FY
2027 FMR Documentation System (available at: <a href="https://www.huduser.gov/portal/datasets/fmr.html#2027_query">https://www.huduser.gov/portal/datasets/fmr.html#2027_query</a>).
IV. Small Area FMRs (SAFMRs)
A. SAFMR Methodology
The methodology for calculating SAFMRs is unchanged from FY 2026.
First, HUD calculates Small Area FMRs directly from the standard
quality gross rents provided to HUD by the Census Bureau for ZIP Code
Tabulation Areas (ZCTAs) when such data are statistically reliable. The
ZCTA two-bedroom equivalent 40th percentile gross rent is analogous to
the standard quality base rents set for metropolitan areas and non-
metropolitan counties. For each ZCTA with statistically reliable gross
rent estimates, HUD calculates a two-bedroom equivalent 40th percentile
gross rent using the first statistically reliable gross rent estimate
from the following data sets (in this order): two-bedroom gross rents,
one-bedroom gross rents, and three-bedroom gross rents. If either the
one-bedroom or three-bedroom gross rent data are used because the two-
bedroom gross rent data are not statistically reliable, HUD converts
the one-bedroom or three-bedroom 40th percentile gross rent to a two-
bedroom equivalent rent using the bedroom ratios for the ZCTA's parent
metropolitan or non-metropolitan area. To increase stability of these
Small Area FMR estimates, HUD averages the latest 3 years of gross rent
estimates.\9\
---------------------------------------------------------------------------
\9\ For example, for FY 2027 Small Area FMRs, HUD averages the
gross rents from 2022, 2023, and 2024 5-Year ACS estimates. The 2022
and 2023 gross rent estimates would be adjusted to 2024 dollars
using the metropolitan area's gross rent CPI adjustment factors.
---------------------------------------------------------------------------
For ZCTAs without usable gross rent data by bedroom count, HUD
calculates Small Area FMRs using the rent ratio method. To calculate
Small Area FMRs using a rent ratio, HUD divides the median gross rent
across all bedrooms for the ZCTA by the similar median gross rent for
the metropolitan or non-metropolitan area of the ZCTA. If a ZCTA does
not have reliable rent data at the all-bedroom level, HUD will then
check to see if the ZCTA borders other ZCTAs that themselves have
reliable rent data. If at least half of a ZCTA's ``neighbors'' have
such data, HUD will use the weighted average of those estimates as the
basis for the Small Area FMR rather than a county proxy, where the
weight is the length of the shared boundary between the ZCTA and its
neighbor. In small areas where the neighboring ZCTA median gross rents
are not statistically reliable, HUD substitutes the median gross rent
for the county containing the ZIP Code in the numerator of the rent
ratio calculation. HUD multiplies this rent ratio by the current two-
bedroom FMR for the metropolitan or non-metropolitan area containing
the small area to generate the current year two-bedroom FMR for the
small area.
HUD continues to use a rolling average of ACS data in calculating
the Small Area FMR rent ratios. HUD believes coupling the most current
data with previous year's data minimizes excessive year-to-year
variability in Small Area FMR rent ratios due to sampling variance.
Therefore, for FY 2027 Small Area FMRs, HUD has updated the rent ratios
to use an average of the rent ratios calculated from the 2018-2022,
2019-2023, and 2020-2024 5-year ACS estimates.
HUD limits each two-bedroom Small Area FMR to be no more than 150
percent of the two-bedroom FMR for the metropolitan or non-metropolitan
area where the ZIP Code is located.
B. SAFMR Mandatory Use
On November 16, 2016, HUD published a final rule entitled
``Establishing a More Effective Fair Market Rent (FMR) System; Using
Small Area Fair Market Rents (Small Area FMRs) in Housing Choice
Voucher Program Instead of the Current 50th Percentile FMRs'' (81 FR
80567) (``final rule'' or ``Small Area FMRs final rule''). Based on
that rule, HUD has required PHAs operating in certain metropolitan
areas to use Small Area Fair Market Rents in determining payment
standards used in the Housing Choice Voucher Program.
On October 25, 2023, HUD published the notice ``Small Area Fair
Market Rents in the Housing Choice Voucher Program--Metropolitan Areas
Subject to Small Area Fair Market Rents'' (88 FR 73352), which requires
41 additional metropolitan areas to use Small Area FMRs in the
administration of the HCV Program.
Additionally, geographic changes for the FY 2026 FMRs changed the
boundaries of two mandatory SAFMR areas: Calvert County, MD was removed
from the Washington-Arlington-Alexandria, DC-VA-MD HUD Metro FMR Area,
and the towns of Bristol, Burlington, Hartland, and Union were removed
from Hartford-West Hartford-East Hartford, CT HUD Metro FMR Area.
Additionally, the towns of Clinton, Deep River, Essex, Killingworth,
Lyme, Old Lyme, Old Saybrook and Westbrook were newly added to the
Hartford-West Hartford-East Hartford, CT MSA. PHAs in all these areas
are required to use Small Area FMRs in determining payment standards.
HUD lists Small Area FMRs for all areas in the Small Area FMR
Schedule. PHAs operating in areas where the use of Small Area FMRs is
not mandated must notify HUD of their voluntary use of Small Area FMRs
in the operation of their HCV Program.
[[Page 56161]]
V. Request for Public Comments and FMR Reevaluations
HUD accepts public comments on the methods HUD uses to calculate FY
2027 FMRs and requests for reevaluation of FMRs for specific areas
until the comment deadline specified in this notice. HUD lacks the
resources to conduct local surveys of rents to address comments filed
regarding the FMR levels for specific areas. PHAs may continue to fund
such surveys independently, as specified below, using ongoing
administrative fees or their administrative fee reserve if they so
choose. HUD continually strives to calculate FMRs that meet the
statutory requirement of using ``the most recent available data'' while
also serving as an effective program parameter.
A. FMR Reevaluation Comment Instructions and Timeline
Section 8(c)(1)(B) of the USHA includes the following: ``The
Secretary shall establish a procedure for public housing agencies and
other interested parties to comment on such fair market rentals and to
request, within a time specified by the Secretary, reevaluation of the
fair market rentals in a jurisdiction before such rentals become
effective.''
Typically, PHAs request a reevaluation of FMRs solely to ensure
that they can establish adequate payment standards. HUD reminds PHAs
that FMRs are also an underlying component of their annual HCV Renewal
Funding Inflation Factors (RFIFs), and potential concerns regarding the
adequacy of the RFIF are important considerations when determining
whether to request an FMR reevaluation.
PHAs or other parties interested in requesting HUD's reevaluation
of their area's FY 2027 FMRs, as provided for under section 8(c)(1)(B)
of USHA, must follow the following procedures:
(1) By the end of the 30-day comment period, PHAs must submit
reevaluation requests through <a href="https://www.regulations.gov/">https://www.regulations.gov/</a> or directly
to HUD as described in the Addresses section above. The area's PHA or,
in multi-jurisdictional areas, PHA(s) representing at least half of the
voucher tenants in the FMR area, must agree that the reevaluation is
necessary.
(2) The requestor(s) must supply HUD with data more recent than the
2024 ACS data used in the calculation of the FY 2027 FMRs. HUD requires
data on gross rents paid in the FMR area for occupied standard quality
rental housing units. Occupied recent mover units (defined as those who
moved in the past 24 months, although a shorter definition may also be
used at the requestor's discretion) provide the best data. The data
delivered must be sufficient for HUD to calculate a 40th percentile
two-bedroom gross rent. Should this type of data not be available,
requestors may gather this information using the survey guidance
available at <a href="https://www.huduser.gov/portal/datasets/fmr/NoteRevisedAreaSurveyProcedures.pdf">https://www.huduser.gov/portal/datasets/fmr/NoteRevisedAreaSurveyProcedures.pdf</a> and <a href="https://www.huduser.gov/portal/datasets/fmr/PrinciplesforPHA-ConductedAreaRentSurveys.pdf">https://www.huduser.gov/portal/datasets/fmr/PrinciplesforPHA-ConductedAreaRentSurveys.pdf</a>.
(3) Areas where valid reevaluation requests are submitted may
continue to use FY 2026 FMRs, or may use the FY 2027 FMRs. Commenters
should indicate whether they wish to maintain the FY 2026 or implement
the FY 2027 FMR during the revaluation period as part of their
reevaluation request. Following the comment period, HUD will post a
list, at <a href="https://www.huduser.gov/portal/datasets/fmr.html">https://www.huduser.gov/portal/datasets/fmr.html</a>, of the areas
requesting reevaluations where FY 2026 FMRs remain in effect.
(4) PHAs or other parties must supply data for reevaluations to HUD
no later than Friday, January 8, 2027. All survey responses of rental
units gathered as part of the survey efforts should be delivered to HUD
via email. As in FY 2026, HUD requests that survey responses include
the ZIP Code or comparable small-area identifier (such as Census tract)
of the housing unit. In addition to the survey data, HUD requires a
current utility schedule to evaluate the survey responses. Finally, HUD
encourages PHAs to evaluate their survey data to ensure the survey
supports their request. Should PHAs or their contractors undertake this
evaluation, HUD requests that this analysis also be submitted.
HUD will use the data delivered by January 8, 2027, to reevaluate
the FMRs and following the reevaluation, HUD will post revised FMRs in
April of 2027 with an accompanying Federal Register notice stating the
revised FMRs are available, which will include HUD's responses to
comments filed during the comment period for this notice. By January
15, 2027, HUD will post at <a href="https://www.huduser.gov/portal/datasets/fmr.html">https://www.huduser.gov/portal/datasets/fmr.html</a> a listing of the areas that requested FMR reevaluations and
continued effect of the FY2026 FMRs, but did not deliver data, making
the FY 2027 FMRs effective in these areas. HUD will incorporate any
data supporting a change in FMRs supplied after January 8, 2027, into
the FY 2028 FMRs. Questions on how to conduct FMR surveys may be
addressed to the Program Parameters and Research Division at
<a href="/cdn-cgi/l/email-protection#5828282a3c18302d3c763f372e"><span class="__cf_email__" data-cfemail="6b1b1b190f2b031e0f450c041d">[email protected]</span></a>.
B. FMR Reevaluation Survey Procedures
PHAs conducting FMR reevaluation surveys should refer to the
guidelines at: <a href="https://www.huduser.gov/portal/datasets/fmr.html#survey_info">https://www.huduser.gov/portal/datasets/fmr.html#survey_info</a>. In general, PHAs must sponsor or conduct an
address-based mail survey that mirrors the rent and housing
characteristics portion of the ACS. Other survey methods are acceptable
in providing data to support reevaluation requests if the survey method
can provide statistically reliable, unbiased estimates of gross rents
paid throughout the entire FMR area and small area identifiers for the
survey responses. In general, recommendations for FMR changes and
supporting data must reflect the rent levels that exist within the
entire FMR area and should be statistically reliable.
PHAs in large metropolitan areas should target sample sizes of at
least 200-300 units; PHAs in non-metropolitan areas are required to
obtain 100 eligible survey responses. In both cases the sample frame
will be considerably larger, taking into account survey non-response
rates and the fact that some units will fail to qualify. PHAs may
conduct surveys of groups of non-metropolitan counties to increase the
number of rental units that are surveyed, but HUD must approve all
county-grouped surveys in advance. HUD cautions that the resulting FMRs
may not be identical for the counties surveyed; each individual FMR
area will have a separate FMR based on the relationship of rents in
that area to the combined rents in the cluster of FMR areas. In
addition, HUD advises that in counties where FMRs are based on the
combined rents in the cluster of FMR areas, HUD will not revise their
FMRs unless the grouped survey results show a revised FMR statistically
different from the combined rent level.
Survey samples should preferably be randomly drawn from a complete
list of rental units for the FMR area. If this is not feasible, the
selected sample must be drawn to be statistically representative of the
entire rental housing stock of the FMR area. Surveys must include units
at all rent levels and be representative by structure type (including
single-family, duplex, and other small rental properties), age of
housing unit, and geographic location. The current 5-year ACS data
should be used as a means of verifying if a sample is representative of
the FMR area's rental housing stock. HUD staff are available to work
with PHAs in areas requesting re-evaluations to provide the
[[Page 56162]]
minimum number of survey cases required to ensure that data submitted
for re-evaluation represent a statistically valid sample. In cases
where a submitted sample is not representative, HUD may attempt to
weight the sample cases prior to calculating 40th percentile rent
estimates.
A PHA or contractor that cannot obtain the recommended number of
sample responses after reasonable efforts should consult with HUD
before abandoning its survey; in such situations, HUD may find it
appropriate to relax normal sample size requirements.
VI. Environmental Impact
This notice involves the establishment of FMR schedules, which do
not constitute a development decision affecting the physical condition
of specific project areas or building sites. Accordingly, under 24 CFR
50.19(c)(6), this notice is categorically excluded from environmental
review under the National Environmental Policy Act of 1969 (42 U.S.C.
4321).
Accordingly, the FMR schedules, which will not be codified in 24
CFR part 888, are available at <a href="https://www.huduser.gov/portal/datasets/fmr.html">https://www.huduser.gov/portal/datasets/fmr.html</a>.
Reid Wilson,
Deputy Chief of Staff to the Secretary, Performing the Delegable Duties
of the Principal Deputy Assistant Secretary for Policy Development and
Research.
[FR Doc. 2026-17891 Filed 8-31-26; 8:45 am]
BILLING CODE 4210-67-P
</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>Indexed from Federal Register on September 1, 2026.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.