HUD fair market rent: what it is and how it affects your voucher

Last updated 2026-07-10

What is HUD's fair market rent and what does it actually measure?

Fair market rent is the dollar amount HUD calculates to represent the gross rent (rent plus tenant-paid utilities) a household needs to rent modest, decent housing in a specific area. The key word is gross. FMR is more than the landlord's asking price. It folds in the utilities the tenant pays, which matters a lot when you compare apartments.

HUD sets FMRs at the 40th percentile of gross rents paid by recent movers into standard-quality units. Forty percent of unsubsidized renters who moved in the last two years paid that amount or less, and 60 percent paid more. The 40th-percentile target is set by regulation at 24 CFR Part 888. ^[1] HUD picked this threshold to give voucher holders real access to most of the rental market without over-subsidizing housing costs.

A handful of areas get higher treatment. HUD designates certain places as 50th-percentile areas, where 50 percent of recent movers' rents define the FMR instead of 40 percent. These are markets identified as tight, with documented trouble for voucher holders finding units. ^[2]

FMRs are set by bedroom size: efficiency (studio), one-bedroom, two-bedroom, three-bedroom, and four-bedroom. Two-bedroom is the baseline HUD uses most for comparisons across metro areas.

How does HUD calculate fair market rents each year?

The primary data source is the American Community Survey (ACS), published by the U.S. Census Bureau. HUD draws on the most recent ACS five-year estimates covering recent movers. ^[3] Because ACS data comes out with a lag, HUD applies a trend factor to push older survey data forward to the current period, capturing rent inflation between the survey and the effective date.

HUD publishes proposed FMRs in the Federal Register each spring, opens a comment period, and finalizes the numbers by October 1, the start of the federal fiscal year. PHAs, tenant advocates, and landlord groups all file comments. A PHA or local government that thinks the published FMR is wrong for its market can request a reevaluation, backing it with local data like random-digit-dialing rent surveys or current listings. HUD has a defined process for reviewing those challenges. ^[4]

In very small areas where ACS sample sizes are too thin to produce reliable estimates, HUD leans on state-level data or borrows from the broader metropolitan area that contains the locality. This is a known limitation. Researchers at the Urban Institute have documented cases where rural FMRs lag actual market rents more than urban ones, because thinner survey samples produce noisier estimates.

One concrete example. For FY 2025, the two-bedroom FMR in the San Jose-Sunnyvale-Santa Clara, CA metro is $3,273. In rural Aroostook County, Maine, it's $921. ^[5] Both are official HUD figures, but the confidence interval around the rural number is wider.

What are the actual 2025 fair market rent numbers by bedroom size?

HUD published FY 2025 FMRs effective October 1, 2024. There are over 2,600 areas, so no single table catches all of them. The table below shows a representative spread across high-cost, mid-cost, and lower-cost metros. All figures are gross rent (rent plus utilities) at the 40th percentile. ^[5]

Metro Area	Efficiency	1 BR	2 BR	3 BR	4 BR
San Jose-Sunnyvale-Santa Clara, CA	$2,358	$2,767	$3,273	$4,369	$4,937
New York-Newark-Jersey City, NY-NJ	$1,917	$2,123	$2,461	$3,095	$3,494
Dallas-Fort Worth-Arlington, TX	$1,190	$1,341	$1,556	$2,049	$2,534
Chicago-Naperville-Elgin, IL	$1,050	$1,218	$1,463	$1,813	$2,141
Memphis, TN-MS-AR	$717	$807	$977	$1,291	$1,535
Rural Aroostook County, ME	$731	$823	$921	$1,163	$1,359

You can look up any specific area using HUD's FMR dataset or the official FY 2025 schedule on HUD's website. ^[5] The numbers update every October. If someone quotes you an FMR figure, always confirm which fiscal year they're citing.

Want a quick lookup for your ZIP code? The fair market rent calculator on VoucherReady pulls from HUD's current published data and breaks down the numbers by bedroom size.

How does the FMR translate into a payment standard at your local PHA?

FMR is a HUD-set number. Payment standard is the number your PHA actually uses to calculate your subsidy. Related, but not the same.

Under 24 CFR 982.503, a PHA can set its payment standard anywhere between 90 percent and 110 percent of the published FMR without HUD approval. ^[6] If the local market is hot and voucher holders can't find units within the FMR, the PHA can request approval to set payment standards up to 120 percent of FMR. In rare, documented cases, HUD has approved exception payment areas above that.

So a two-bedroom FMR of $1,556 in Dallas means a PHA there might set its payment standard anywhere from $1,400 (90% of FMR) to $1,712 (110% of FMR) without going to HUD. The PHA picks where to land based on its funding allocation and what it sees in the local market.

Your subsidy is the payment standard minus 30 percent of your adjusted monthly income. If the actual rent your landlord charges plus your utility allowance exceeds the payment standard, you pay the difference. That extra amount is called the rent burden or top-up. Under federal rules, your total out-of-pocket share can't exceed 40 percent of your monthly adjusted income at initial lease-up. ^[7] Once you're in the unit, if rents climb past that 40-percent ceiling, you might not be able to afford to stay.

This is why payment standards matter more to your daily life than the raw FMR. Ask your PHA for its current payment standard schedule, by bedroom size, before you start looking. Don't guess from the HUD FMR alone.

Why does HUD update FMRs every year and what happens if they don't keep up with the market?

Rents change. In fast-growing metros, they change fast. HUD's obligation under Section 8(c)(1) of the United States Housing Act of 1937 is to set FMRs at a level that gives low-income families a real opportunity to lease standard-quality units throughout the metropolitan area. ^[8] If FMRs lag actual market rents, voucher holders get priced out.

From 2020 through 2023, many metros saw rents jump 20 to 40 percent, far ahead of ACS survey cycles. HUD switched from a 1-year ACS to a 5-year ACS (larger sample sizes, but still a lag) and pushed its trend factors upward. Even so, independent researchers found gaps. A 2023 analysis by the National Low Income Housing Coalition found that in some metros, FMRs were still running 10 to 15 percent below actual median asking rents for available units, leaving voucher holders with a ceiling below the true market. ^[9]

When FMRs fall behind, the same things happen every time. Landlords decline to participate because the payment standard doesn't cover their unit. Voucher holders lose housing they'd otherwise qualify for. Voucher utilization rates drop, which wastes federal money. PHAs in tight markets request exception payment standards more often, piling on administrative work.

The flip side matters too. Set FMRs too high and HUD and Congress overspend on rental assistance relative to what the market actually requires. The 40th-percentile threshold is a deliberate policy balance, not a technical inevitability.

How do landlords use FMR information when deciding whether to accept vouchers?

If you're a landlord weighing whether to list a unit for homes for rent with section 8, the FMR and payment standard are the first numbers to learn. They tell you the ceiling the PHA will cover.

The rent your unit can charge under the voucher program has two limits. First, the gross rent (your asking rent plus the utility allowance for tenant-paid utilities) can't exceed the PHA's payment standard for the unit's bedroom size. Second, the rent has to pass a rent reasonableness test: the PHA compares your unit to comparable unsubsidized units nearby and won't approve a rent out of line with those comps. ^[6]

Say you own a two-bedroom in a mid-market city where the payment standard is $1,400 and comparable market units rent for $1,350. A voucher tenant works fine for you. If your unit would genuinely command $1,800 on the open market, the voucher program probably isn't a fit unless you have a reason to take below-market rent (stability, low vacancy risk, no advertising cost).

Landlords sometimes assume the FMR is the rent they'll receive. Not quite. The payment standard sets the subsidy ceiling. The actual subsidy the PHA pays is the payment standard minus roughly 30 percent of the tenant's income. The PHA pays you that portion directly; the tenant covers the rest. Your total rent check comes from two payers.

Checking FMR data before you set rents on a section 8 rent house is real due diligence, not optional paperwork. See apts that take section 8 for a broader look at unit types that tend to work within FMR limits.

What's the difference between FMR, small area FMR, and payment standard?

HUD created Small Area Fair Market Rents (SAFMRs) to solve a real problem: metro-wide FMRs are averages, but rents vary enormously within a single metro. One FMR for the Dallas metro doesn't tell a high-cost neighborhood in Plano apart from a lower-cost one in South Dallas. Use a single number for the whole metro and voucher holders get priced out of high-opportunity neighborhoods.

Small Area FMRs are set at the ZIP code level, not the metro level. Under a SAFMR, the payment standard in a high-rent ZIP runs higher than the metro average, and in a lower-rent ZIP it runs lower. HUD required certain large PHAs to move to SAFMRs starting in 2018, with expansions since. ^[10] Under current rules, HUD mandates SAFMRs in designated metropolitan areas with high voucher concentration and high poverty concentration.

The regulation governing SAFMR applicability is 24 CFR 888.113. ^[10] PHAs not required to use SAFMRs can still opt in voluntarily.

Here's the hierarchy:

Term	Set by	Geographic level	Purpose
FMR	HUD	Metro area or county	Benchmark for subsidy policy
SAFMR	HUD	ZIP code	Expand access to higher-opportunity areas
Payment standard	PHA	PHA jurisdiction (or sub-area)	Actual subsidy cap used in your HAP contract

If your PHA uses SAFMRs, the payment standard on your voucher shifts based on where you actually rent, not a single metro-wide average. That can meaningfully widen your options in desirable neighborhoods.

Can a landlord charge more than the FMR and can a tenant pay the difference?

Yes, with limits. A landlord can ask for any rent they want. But the PHA only approves it if it passes the rent reasonableness test and doesn't push the tenant's out-of-pocket share above 40 percent of adjusted income at initial lease-up. ^[7]

Here's the math. Say the payment standard is $1,500, the landlord wants $1,700, and your 30 percent income contribution is $400. The PHA pays $1,100 (payment standard minus your share). You pay that $400, plus the $200 gap between the payment standard and the actual rent, for a total of $600. That $600 hits exactly 40 percent of your adjusted monthly income only if your adjusted income is $1,500 per month. Lower than that, you're over the cap, and the PHA won't approve the rent. Higher, and the math may work.

After initial lease-up, if the landlord raises rent above what the payment standard covers, you pay the gap. There's no hard legal ceiling on your share after year one, only your ability to actually pay it. That's a real financial risk for tenants in rising markets.

Landlords looking at low income houses for rent sometimes get frustrated that their asking rent tops the payment standard. The straight answer: if the comps in your neighborhood genuinely don't support rents above the payment standard, adjust expectations or focus on market-rate tenants. If the payment standard is just out of date with local rents, work with your PHA to push for a higher one through the public comment process on FMRs.

How do you look up the FMR for a specific city or ZIP code?

HUD publishes the complete FMR dataset for every fiscal year at huduser.gov. ^[5] The FY 2025 data downloads as a spreadsheet and also runs through a web tool. You pick a state, then a metro area or county, and the site returns the five bedroom-size FMRs.

For ZIP-code-level data, you need the SAFMR tool, also on HUD's site, which covers designated SAFMR areas. ^[10]

Fair warning on the HUD tools: they work, but they're ugly. They're built for housing administrators, not casual users, and the interface hasn't changed much in years. If you want a friendlier lookup, the fair market rent calculator is worth bookmarking. It uses HUD's published data but shows the numbers in a format you can read fast.

A few things to watch for:

• Confirm you're looking at the current fiscal year. HUD pages sometimes leave prior-year data visible.
• The area name in HUD's database doesn't always match a city name. The FMR for Boston applies to a large metro that includes Cambridge, Quincy, and many suburbs. Search just "Boston" and you might miss the sub-area your PHA uses.
• HUD's FMR area definitions don't always match OMB metro area definitions. Boundaries matter. When in doubt, call your PHA and ask which FMR area code covers your address.

How FMR affects portability: moving your voucher to a new area

When a voucher holder ports to a different PHA jurisdiction, the receiving PHA applies its own payment standard, based on its local FMR. Your voucher doesn't carry a dollar amount from your old PHA. It carries your eligibility and bedroom size. The new PHA's FMR, and its payment standard, decide your subsidy in the new city.

This matters enormously moving from a low-cost area to a high-cost one. Hold a voucher in rural Alabama where the two-bedroom FMR runs around $800, port to Seattle where the two-bedroom FMR tops $2,200, and you'll benefit from the higher Seattle payment standard. You'll also face Seattle rents, and your income-based contribution stays the same percentage. The net effect on your out-of-pocket cost depends entirely on your income relative to the payment standard in each place.

Porting the other way, from high-cost to low-cost, generally cuts the PHA's per-unit cost and can free up funding for the receiving PHA. Some PHAs absorb porting vouchers into their own program; others bill the originating PHA. The billing mechanics sit apart from the FMR question, but they're worth understanding if you plan to move.

See resources on hud housing for rent for how to find units after a port, and check go section 8 houses for rent for listings in your destination area.

What are the policy debates around how HUD sets FMRs?

The 40th-percentile threshold has drawn fire since HUD set it. Tenant advocates argue it's too low: in tight markets, it leaves voucher holders competing for the cheapest 40 percent of units, which cluster in higher-poverty, lower-opportunity neighborhoods. Landlord groups and fiscal hawks argue that pushing FMRs higher raises federal costs without adding housing supply. Both have a point.

The SAFMR reform answered research showing that metro-wide FMRs concentrate voucher holders in low-income, high-poverty neighborhoods. A major study by Raj Chetty, Nathaniel Hendren, and Lawrence Katz, published in 2016 in the American Economic Review, found that moving low-income children to lower-poverty areas produced large, lasting gains in earnings and college attendance. The authors concluded that "younger children experience larger gains from moving to lower-poverty areas." ^[11] HUD cited that research as part of its case for expanding SAFMR use.

The ACS lag is a separate critique. Because ACS data takes 2 to 3 years to reach FMR calculations, FMRs in fast-moving markets can fall well behind actual rents. HUD's trend adjustment helps but doesn't close the gap. During the 2021-2023 rent surge, several PHAs documented payment standards running 15 to 25 percent below actual available market rents, which effectively made their vouchers unusable across most of the metro. HUD answered with interim guidance and faster data updates, but the structural lag in ACS still isn't solved.

For tenants weighing low income housing options beyond Section 8 vouchers, know that FMRs also drive income limits and rent ceilings in other HUD programs, including the HOME Investment Partnerships Program and certain project-based Section 8 contracts.

VoucherReady's tenant tools include a payment standard estimator if you want to cross-check your PHA's published numbers against current HUD FMR data for your area.

Frequently asked questions

What does HUD fair market rent actually mean for a Section 8 tenant?

FMR is the cap HUD uses to anchor how much your voucher can cover. Your PHA sets a payment standard based on the FMR, typically between 90 and 110 percent of it. The subsidy you get is that payment standard minus 30 percent of your adjusted income. Rent a unit priced above the payment standard and you pay the difference. Knowing your local FMR helps you target apartments likely to be approved.

Does HUD fair market rent include utilities?

Yes. FMR is a gross rent figure: it covers the unit rent plus all tenant-paid utilities except telephone and cable. When your PHA checks whether a unit's rent fits the payment standard, it adds a utility allowance to the contract rent and compares that total to the payment standard. Rent a unit with utilities included and the calculation is simpler. Pay your own utilities and the allowance gets subtracted from your share.

How often does HUD update fair market rents?

HUD publishes new FMRs every year, effective October 1 (the start of the federal fiscal year). HUD proposes FMRs in spring, takes public comments, and finalizes them before October. FY 2025 FMRs have been in effect since October 1, 2024. Some PHAs update payment standards at the same time; others update mid-year or on a different cycle.

Can a landlord refuse to accept a rent below FMR?

Yes. Landlords set their own asking rents. FMR and payment standards are subsidy limits, not a government price floor. A landlord whose market rent tops the payment standard isn't obligated to accept the voucher program's terms. Some states and cities have source-of-income laws that bar landlords from refusing voucher holders, but those laws don't force landlords to accept below-market rents. They ban discrimination based on how rent gets paid.

What is a Small Area Fair Market Rent (SAFMR) and is it better for tenants?

SAFMR sets payment standards at the ZIP code level instead of the metro average. In high-cost ZIP codes within a metro, the SAFMR runs higher, giving voucher holders more buying power in desirable neighborhoods. In lower-cost ZIPs, it runs lower. Research, including the Chetty, Hendren, and Katz (2016) study in the American Economic Review, supports the idea that moving to lower-poverty areas produces lasting economic gains for children, which was part of HUD's case for expanding SAFMRs.

What percentage of FMR does a PHA use for its payment standard?

Under 24 CFR 982.503, a PHA can set payment standards between 90 and 110 percent of the published FMR without HUD approval. If a PHA documents that voucher holders can't find housing in that range, it can request HUD approval for exception payment areas up to 120 percent of FMR. Some high-cost areas have gotten approvals above 120 percent. Contact your PHA directly for its current payment standard schedule.

How do I find the fair market rent for my city or ZIP code?

HUD publishes the full FMR dataset at huduser.gov, searchable by state and metro area. For ZIP-code-level data in SAFMR-designated areas, use HUD's SAFMR tool on the same site. Both tools use the most recent fiscal year data. Confirm the fiscal year on the page; prior-year data sometimes stays visible. Your PHA can also tell you exactly which FMR area and payment standard applies to your voucher.

What happens if the rent I find is above the fair market rent?

The PHA won't approve the unit unless your out-of-pocket share stays within 40 percent of your adjusted monthly income at initial lease-up. If the unit rent tops the payment standard, you pay the gap on top of your standard 30-percent income contribution. If that total exceeds 40 percent of your income, the PHA won't approve it. After you're in the unit, there's no hard cap on your share if rents rise, but the PHA still has to approve any rent increase.

Does the FMR change if I have a larger family and need more bedrooms?

Yes. HUD publishes separate FMRs for efficiency (studio), one-bedroom, two-bedroom, three-bedroom, and four-bedroom units. Larger units carry higher FMRs. Your PHA issues your voucher with a bedroom-size designation based on your family composition. That designation sets which FMR and payment standard apply. If your family grows and you request a larger voucher, the higher-bedroom payment standard applies.

Can I find a HUD house or HUD-owned property using the FMR?

FMR doesn't directly apply to HUD-owned or foreclosed properties, which are sold (not rented) through HUD's homeownership programs. If you're looking for hud houses for rent or hud house listings, those are typically properties managed by local housing authorities under project-based contracts, and their rents are often set in relation to FMR or area median income. The FMR is still the reference point, but the specific contract terms vary by property.

How does FMR affect my voucher when I port to a new city?

When you port to a new PHA's jurisdiction, that PHA applies its own payment standard based on its local FMR. Your subsidy gets recalculated on the new area's numbers. Moving to a higher-FMR metro generally raises your subsidy, but also means higher market rents. Moving to a lower-FMR area cuts the PHA's cost per unit. Your 30-percent income contribution stays the same percentage no matter where you move.

Is FMR the same as the Section 8 income limit?

No. FMR and income limits are separate HUD calculations. FMR sets the rent subsidy ceiling. Income limits determine eligibility for the voucher program. Both are calculated by metro area and both update annually, but they use different data sources and formulas. Income limits for HCV are typically set at 50 percent of Area Median Income, though most new admissions must be at 30 percent or below. FMR has no income component.

What is the 40th percentile rule for HUD fair market rents?

HUD is required by 24 CFR Part 888 to set FMRs at the 40th percentile of gross rents paid by recent movers into standard-quality, non-luxury units. Recent movers are households that moved within the past two years. So the FMR sits below 60 percent of market rents, by design. The intent is to give voucher holders real access to the market without paying above median rates. Some designated areas use the 50th percentile instead.

Sources

1. HUD, 24 CFR Part 888 - Section 8 Housing Assistance Payments Program Fair Market Rents: HUD is required to set FMRs at the 40th percentile of gross rents paid by recent movers for standard-quality units
2. HUD Office of Policy Development and Research, Fair Market Rents Overview: Certain areas are designated 50th-percentile areas where FMRs are set at the 50th percentile of recent movers' rents
3. U.S. Census Bureau, American Community Survey: HUD uses ACS five-year estimates covering recent movers as the primary data source for FMR calculations
4. HUD, FMR Reevaluation Request Process: PHAs and local governments can file formal requests for FMR reevaluation by providing local market data
5. HUD Office of Policy Development and Research, FY 2025 Fair Market Rents: FY 2025 FMR data published by HUD, including two-bedroom FMRs of $3,273 in San Jose and $921 in rural Aroostook County, ME
6. HUD, 24 CFR 982.503 - Payment Standard Amount and Schedule: PHAs can set payment standards between 90 and 110 percent of the FMR without HUD approval; rent must pass a rent reasonableness test
7. HUD, 24 CFR 982.508 - Tenant Rent Limit at Initial Occupancy: Tenant's total housing cost cannot exceed 40 percent of adjusted monthly income at initial lease-up
8. United States Housing Act of 1937, Section 8(c)(1): Statute requires HUD to set FMRs at a level giving low-income families a real opportunity to lease standard-quality units throughout the metropolitan area
9. National Low Income Housing Coalition, Out of Reach Report 2023: In some metros, FMRs were running 10 to 15 percent below actual median asking rents for available units in 2023
10. HUD, 24 CFR 888.113 - Small Area Fair Market Rents: HUD mandates SAFMRs in designated metropolitan areas with high voucher concentration and high poverty concentration; certain large PHAs were required to move to SAFMRs beginning in 2018
11. Chetty, Raj; Hendren, Nathaniel; Katz, Lawrence F. The Effects of Exposure to Better Neighborhoods on Children. American Economic Review, 2016: Moving low-income children to lower-poverty areas produced large, lasting gains in earnings and college attendance; HUD cited this research in its rationale for expanding SAFMR use