Last updated 2026-07-10
TL;DR
Fair market rent (FMR) is HUD's published estimate of the gross rent (base rent plus utilities) that a modest, decent unit in a given area rents for at the 40th percentile of the local market. HUD updates FMRs every federal fiscal year. PHAs use them to set payment standards, which cap how much a Section 8 voucher will cover. FMRs vary by bedroom size and metro area.
What is fair market rent, exactly?
Fair market rent is a dollar figure HUD publishes each year for every metropolitan area and non-metro county in the United States. It represents the 40th percentile of gross rents paid by recent movers for decent, modest units of a given bedroom size in that area. [1]
Breaking that down: "gross rent" means base rent plus estimated tenant-paid utilities. "Recent movers" means households that moved into their unit within the past 15 months. The 40th percentile means 40 percent of comparable rentals cost less, and 60 percent cost more. HUD targets the lower-middle of the market on purpose, keeping the program affordable for the federal budget while still giving voucher holders real access to decent housing.
FMRs are not the maximum a landlord can charge. They are not the maximum a tenant pays. They are the anchor number PHAs use to calculate payment standards, which are the actual dollar caps your housing authority applies to voucher assistance. The distinction matters a lot once you're shopping for a unit.
FMRs are published in the Federal Register and go into effect October 1 each year, the start of the federal fiscal year. The regulation defining them sits at 24 CFR Part 888. [2]
How does HUD actually calculate fair market rent?
The short version: HUD runs American Community Survey (ACS) data through a series of adjustments, then cross-checks the result against more recent rental data where available. [1]
Here is the longer version. HUD starts with five-year ACS estimates from the U.S. Census Bureau, pulling reported gross rents for recent movers in each FMR area. It then applies an inflation factor to bring that data forward to the current year, using Consumer Price Index (CPI) rent and utility indexes from the Bureau of Labor Statistics. In large metro areas with enough fresh data, HUD also uses one-year ACS estimates to sharpen the estimate.
For areas where ACS sample sizes are too small to be reliable, HUD borrows data from the surrounding region or uses regression-based estimates. This is why two counties sitting side by side can have noticeably different FMRs: one may have enough local rental data to stand alone and one may not.
Since 2017, HUD has had the authority to use random-digit dialing (RDD) surveys in selected metro areas to collect more current rent data. Where those surveys exist, they can override the ACS-based estimate. HUD's Office of Policy Development and Research publishes the methodology in full each year. [3]
One thing worth knowing: HUD can and does publish revised FMRs mid-year when a PHA or local government provides data showing the initial estimate was significantly off. PHAs can also request a re-evaluation, and a number do when their local markets have moved sharply.
What does the 40th percentile really mean in practice?
Picture 100 two-bedroom apartments in your metro that were rented by someone who just moved in. Sort them from cheapest to most expensive. The 40th unit in that list is your FMR. That unit is decent and modest but not the cheapest thing available.
HUD used to target the 45th percentile, then dropped it to 40 in the early 1990s as a budget control. Some metro areas with very tight rental markets have received what HUD calls "Small Area FMRs" (SAFMRs), which use ZIP-code-level data instead of metro-wide data, effectively getting closer to the real 40th percentile in expensive neighborhoods. [4]
The practical result of a 40th percentile target is that in high-demand markets, voucher holders can genuinely struggle to find a unit whose gross rent falls below the FMR. Landlords who know their market is priced well above the FMR have little reason to accept a voucher. In softer markets, the FMR can actually sit above what many units rent for, giving voucher holders more room to negotiate.
How do I look up the fair market rent in my area?
HUD maintains a free public lookup tool at huduser.gov. Go to the FMR page under the Office of Policy Development and Research, select the current fiscal year, pick your state, and then select your county or metro area. [1] The results show FMRs for efficiency (studio), one-bedroom, two-bedroom, three-bedroom, and four-bedroom units.
A few things to watch: HUD often defines metro areas differently than you might expect. The "Dallas-Fort Worth-Arlington, TX HUD Metro FMR Area" covers a large multi-county region, so the FMR is an average across that whole area. If your PHA uses Small Area FMRs, the relevant number by ZIP code will differ from the metro-wide figure.
Your PHA's website is also a reliable source. Most PHAs post their current payment standards (which are set between 90% and 110% of the local FMR) alongside or instead of the raw FMR. The payment standard is ultimately more useful to you as a voucher holder than the FMR itself, because that is the number that actually caps your subsidy.
For a faster calculation of how a specific rent compares to local FMRs, the fair market rent calculator on VoucherReady crunches the current HUD data by ZIP code and bedroom count.
HUD publishes current and historical FMR data going back decades at no cost. The data is also downloadable as spreadsheets for anyone who wants to analyze trends.
What is the difference between FMR and a PHA payment standard?
This is the single most common source of confusion in the program, so it deserves a clear answer.
FMR is a HUD number. Payment standard is a PHA number. The PHA is required by 24 CFR 982.503 to set its payment standard somewhere between 90% and 110% of the local FMR. [5] Within that range the PHA has full discretion. A PHA in a tight rental market might set its standard at 110% to help voucher holders compete. A PHA in a softer market might set it at 95%.
The payment standard is the actual ceiling on the subsidy. If the payment standard for a two-bedroom is $1,400, the PHA will pay the lesser of the actual gross rent or $1,400, minus your share (roughly 30% of your adjusted monthly income). If the landlord charges $1,600, the extra $200 comes out of your pocket, on top of your normal tenant share, as long as the total does not exceed 40% of your monthly income at move-in. [5]
HUD can also grant exception payment standards above 110% in genuinely high-cost areas, with HUD approval. These exceptions have been used in markets like San Francisco and Honolulu.
Here is a simple comparison of how the numbers relate:
| Term | Set by | Based on | Effect on you |
|---|---|---|---|
| Fair Market Rent (FMR) | HUD | 40th percentile of local gross rents | Anchor for PHA math |
| Payment Standard | PHA | 90-110% of FMR (or HUD-approved exception) | Actual cap on your subsidy |
| Gross Rent | Landlord + utility estimate | Market conditions | What gets compared to payment standard |
| Tenant Share | You | ~30% of adjusted income, min 10% | What you pay each month |
How often does HUD update FMRs and by how much do they change?
HUD updates FMRs every year, effective October 1. [1] How much they move depends entirely on what rents in that market did over the survey period.
In the 2022 and 2023 cycles, FMRs jumped sharply in many metros, reflecting the rent surge that followed the pandemic. HUD's FY2023 FMRs rose an average of roughly 10% nationally, with some metros seeing increases of 20% or more. [6] For FY2024 and FY2025, increases moderated in many areas but stayed above historical averages in Sun Belt metros.
For voucher holders, a mid-year FMR increase does not automatically help you. Your PHA has to formally revise its payment standard and notify you before you see any change in your subsidy. Some PHAs update payment standards annually. Others do it less often. Ask your caseworker when the PHA last updated its standards and whether an update is pending.
For landlords deciding whether to accept vouchers, a rising FMR trend matters a lot. In markets where FMRs are catching up to market rents, the economics of accepting a voucher tenant improve substantially. Finding homes for rent with section 8 in those markets is getting easier as a result.
What are Small Area Fair Market Rents and who uses them?
Standard FMRs cover an entire metro area. Small Area FMRs (SAFMRs) break that metro into individual ZIP codes and calculate a separate FMR for each one. [4]
The logic is straightforward. A single metro-wide FMR for Dallas might describe the middle of the metro accurately but be far too low for a wealthy suburb and far too high for a lower-income neighborhood. With a ZIP-level SAFMR, a voucher in the upscale suburb gets a higher payment standard, and one in the cheaper area gets a lower one. In theory this gives voucher holders more choice in higher-opportunity neighborhoods.
HUD mandated SAFMRs for certain large, high-rent metro areas starting in 2017. As of the rules finalized in 2021 under 24 CFR Part 888 Subpart B, PHAs in designated metros must use SAFMRs unless they receive a waiver. [4] HUD also allows non-designated PHAs to voluntarily adopt SAFMRs.
If you are a voucher holder in a SAFMR area, you need the SAFMR for the specific ZIP code where you want to rent, not the metro-wide FMR. Your PHA should walk you through this, but it is also worth checking yourself on the HUD SAFMR lookup tool at huduser.gov. The ZIP-level number can be dramatically higher or lower than the metro average.
Does fair market rent cover utilities?
Yes, by definition. FMR is a gross rent figure, meaning it includes an estimate for tenant-paid utilities. [1]
Where this gets complicated is in practice. When a landlord includes all utilities in the rent, the gross rent is just the contract rent. When the tenant pays some or all utilities, the PHA adds a utility allowance to the contract rent to arrive at gross rent. The utility allowance schedule is set by the PHA based on local utility costs and unit type.
If the gross rent (contract rent plus utility allowance) is at or below the payment standard, you are in good shape. If your landlord offers a unit with a low contract rent but you will pay very high utilities, the utility allowance can eat into the payment standard fast.
As a tenant, always ask the landlord what utilities are included before signing anything. Then ask your PHA caseworker for the current utility allowance schedule for that unit type. These numbers matter more than most people realize when you are trying to figure out whether a unit is actually affordable under your voucher.
How does fair market rent affect landlords who accept Section 8?
For a landlord, the FMR and the PHA payment standard together define the ceiling of what the PHA will pay. If your unit rents at or below the payment standard and passes the Housing Quality Standards inspection, you can typically rent to a voucher holder with the PHA covering the difference between the tenant's share and the contract rent. [7]
The practical question most landlords ask is whether the payment standard is close enough to market rent to make it worth their time. In many metros it is. HUD's own data shows that the median voucher rent in FY2023 was close to or above local FMR in many smaller markets. In high-cost markets the gap can be wider.
Landlords sometimes ask whether they can charge a voucher tenant more than they charge an unassisted tenant for the same unit. The answer is no. The rent charged to a voucher holder cannot exceed the rent charged to unassisted tenants for comparable units in the building (24 CFR 982.507). [5] PHAs also conduct rent reasonableness determinations before approving any lease.
If you own rental property and are weighing the decision to accept vouchers, understanding the local payment standard is step one. The section 8 rent house overview on VoucherReady walks through the landlord side of this process in more detail.
Can a voucher holder rent a unit above fair market rent?
Yes, with limits. Nothing in the program strictly bans renting above the FMR or the payment standard. [5]
Here is the mechanism: the payment standard caps the PHA's share of the rent. If the gross rent exceeds the payment standard, you as the tenant pay the difference, plus your standard tenant share. The combined total cannot exceed 40% of your adjusted monthly income at move-in. [5] After move-in, if rents increase, there is no hard 40% cap on subsequent years, though PHAs have some discretion to protect tenants from unaffordable rent increases.
So if the payment standard for your bedroom size is $1,400, the gross rent is $1,600, and your tenant share (30% of adjusted income) is $400, your total monthly cost would be $400 plus the $200 gap, or $600. Whether that is affordable depends entirely on your income.
Going over the FMR is common in expensive cities and tight rental markets. For tenants, the risk is overpaying your way into housing instability. For landlords, there is no extra paperwork for renting above the FMR. You just collect the gap from the tenant directly.
Why do FMRs differ so much between cities?
FMRs are local by design. A two-bedroom FMR in rural Mississippi runs around $700 to $800. In San Jose, California, it tops $3,000. [1] That gap reflects real differences in land costs, construction costs, income levels, population density, and local housing supply.
Within a state the variation can still be large. In Texas, the two-bedroom FMR in rural West Texas may be $800 while the Dallas-Fort Worth metro sits around $1,400 and Austin well above that. These numbers move every year, so check the current HUD lookup rather than relying on anything older than a year.
For voucher holders considering a port (moving your voucher to a different PHA), the FMR difference between origin and destination directly affects your subsidy level. A voucher calibrated to the Boston payment standard will not automatically give you an equivalent subsidy in, say, Phoenix. The receiving PHA applies its own payment standard once the port is absorbed. This is one of the less-discussed costs of porting that tenants should factor in before committing to a move.
If you are exploring low income housing or looking at apts that take section 8 in a new city, the first thing to look up is the destination PHA's current payment standards, more than the FMR.
What happens to FMR during high inflation?
The ACS data that drives FMR calculations has a built-in lag. HUD generally uses survey data that is 12 to 24 months old by the time the FMR takes effect. In periods of rapid rent inflation, that lag means FMRs can run behind actual market rents for a year or two before catching up. [3]
That is exactly what happened in 2021 and 2022. Rents in many cities jumped 15% to 25% within 12 months, but FMRs for that same period reflected older, lower data. Voucher holders in fast-moving markets found it nearly impossible to lease up because landlords could get more from market-rate tenants than the payment standard allowed.
HUD responded by publishing higher FMRs for FY2023 and announcing more frequent reviews. Under 24 CFR 888.113, HUD can revise FMRs mid-year if there is evidence of material change. [2] A few PHAs also applied for and received exception payment standards during that period.
The inflation episode was a useful reminder that FMRs are an approximation, not a guarantee of market access. In any given year, in any given city, the FMR may be above or below what you actually need to find a decent unit.
Where can I find historical FMR data to see trends in my market?
HUD publishes historical FMR datasets going back to FY2000 on the HUD User portal (huduser.gov), the research arm of HUD's Office of Policy Development and Research. [3] The data downloads as Excel or CSV files organized by FMR area, bedroom size, and fiscal year.
For a quick trend check without downloading spreadsheets, the National Low Income Housing Coalition (NLIHC) publishes the annual Out of Reach report, which compares FMRs to local wages across every state. [8] Their Housing Wage figure (the hourly wage needed to afford the two-bedroom FMR at 30% of income) is widely cited and updated each year.
A few things to watch in historical data: HUD periodically redraws FMR area boundaries to match updated metro definitions from the Office of Management and Budget (OMB). When an area is redrawn, a comparison to prior years needs extra care because the geographic footprint changed.
Analysts tracking affordability over time often use the two-bedroom FMR as a standard yardstick since it is the most common bedroom size in the voucher program. As of FY2025, the two-bedroom FMR in the 50 largest metros ranged from roughly $1,100 to over $3,000 depending on location. [1]
Frequently asked questions
What is fair market rent in my area right now?
The fastest way to find your current FMR is HUD's official lookup tool at huduser.gov. Select the current fiscal year, your state, and then your county or metro area. FMRs are listed by bedroom size from efficiency through four-bedroom. Your PHA's website will also list the payment standards it has set based on those FMRs, which is the more directly useful number for voucher holders.
Is fair market rent the same as the maximum rent a landlord can charge a Section 8 tenant?
No. FMR is the anchor HUD uses. The actual ceiling is your PHA's payment standard, which is set between 90% and 110% of the FMR. Landlords can charge above the payment standard, and tenants can pay the difference, as long as the total does not exceed 40% of adjusted monthly income at move-in. Rent must also pass the PHA's rent reasonableness test.
How is FMR different from the payment standard?
FMR is set by HUD nationally. Payment standard is set by your local PHA, within the range of 90% to 110% of the FMR under 24 CFR 982.503. The payment standard is what actually limits your subsidy. Two PHAs in neighboring counties can have the same FMR but different payment standards. Always ask your PHA for its current payment standard schedule, more than the FMR.
Can a landlord refuse to rent to me because my voucher amount is below their asking rent?
In many states and cities, landlords are legally prohibited from refusing to rent solely because a tenant uses a voucher (source-of-income protection laws). But if the gross rent genuinely exceeds the payment standard plus the 40% income cap, the unit may simply be unworkable under your voucher regardless. Source-of-income laws vary by state and locality, so check your state's tenant protection statutes.
Does HUD update fair market rents every year?
Yes. HUD publishes new FMRs each federal fiscal year, effective October 1. Proposed FMRs are published in the Federal Register, typically in late spring or summer, with a public comment period before the final numbers are set. PHAs are then required to adjust their payment standards to stay within the 90% to 110% range of the new FMRs, though they may not do so immediately.
What does gross rent mean in the FMR context?
Gross rent equals contract rent (what you pay the landlord) plus estimated tenant-paid utilities. FMRs are always expressed as gross rent figures. When the PHA compares a unit's rent to the payment standard, it uses gross rent: if utilities are included in the landlord's price, that is the gross rent. If you pay utilities separately, the PHA adds a utility allowance to the contract rent.
Are there different FMRs for different neighborhoods within a city?
In most metro areas, one FMR covers the entire metro. In designated high-cost metros, HUD requires Small Area FMRs (SAFMRs), which set separate FMRs by ZIP code. SAFMRs are required under 24 CFR Part 888 Subpart B in certain large metros. If you are in a SAFMR area, the ZIP-level number can be significantly higher or lower than the metro-wide average, which changes what you can realistically afford.
If I port my voucher to another city, does the FMR change?
Yes. When you port to another PHA's jurisdiction, the receiving PHA applies its own payment standard once the voucher is absorbed. Your subsidy is recalculated based on the new area's payment standard and your share of adjusted income. If you are moving from a lower-cost market to a higher-cost one, the receiving PHA's higher payment standard can help. Going the other direction, your subsidy may shrink.
Why can't I find an apartment at the FMR in my city?
FMRs target the 40th percentile of the market for recent movers. In tight rental markets, that 40th percentile unit is often taken before a voucher holder can complete the approval process, or landlords prefer unassisted tenants. FMR data also lags real market conditions by 12 to 24 months due to the ACS survey timeline. In fast-rising markets, the FMR can be visibly below current asking rents.
How do I calculate what my share of rent will be based on the FMR and my income?
Your tenant share is generally 30% of your adjusted monthly income. If the gross rent is at or below the payment standard, the PHA pays the difference and you pay 30% of income. If the gross rent exceeds the payment standard, you pay 30% of income plus the gap, capped at 40% of income at move-in. Your PHA caseworker can run the exact calculation for any unit you are considering.
Are FMRs used for anything other than Section 8 vouchers?
Yes. FMRs are also used in the Section 8 Moderate Rehabilitation program, the HOME Investment Partnerships program (as a rent ceiling for assisted units), rural housing rental assistance under USDA, and various other HUD programs. Some states use FMRs as a reference point in low-income housing tax credit (LIHTC) programs. The number shows up across almost every federal rental assistance program.
Can a PHA set payment standards above 110% of FMR?
Yes, but only with HUD approval. These are called exception payment standards. HUD grants them when a PHA demonstrates that the standard FMR range is not sufficient for voucher holders to access decent housing in the area. PHAs in very high-cost metros like San Francisco have used exception payment standards. The request and approval process is governed by 24 CFR 982.503(c).
What is the two-bedroom FMR used for as a benchmark?
The two-bedroom FMR is the most commonly cited FMR in policy discussions because it reflects a typical family unit and provides a consistent national comparison point. The National Low Income Housing Coalition's annual Out of Reach report uses the two-bedroom FMR to calculate the Housing Wage, the hourly wage a full-time worker needs to afford that rent at 30% of income without any subsidy.
Sources
- HUD Office of Policy Development and Research, Fair Market Rents Overview: FMRs represent the 40th percentile of gross rents for recent movers in each area; HUD publishes them annually for all metro areas and non-metro counties by bedroom size.
- Code of Federal Regulations, 24 CFR Part 888, Section 8 Housing Assistance Payments Program: FMRs are defined and governed under 24 CFR Part 888; 24 CFR 888.113 authorizes mid-year revisions when evidence of material change exists.
- HUD User, FMR Methodology and Data Documentation: HUD uses American Community Survey five-year estimates adjusted by CPI indexes; one-year ACS used in large metros; RDD surveys used in selected metros since 2017; historical data available back to FY2000.
- HUD Office of Policy Development and Research, Small Area Fair Market Rents: SAFMRs set ZIP-code-level FMRs in designated high-cost metros; PHAs in mandatory areas must use SAFMRs under 24 CFR Part 888 Subpart B.
- Code of Federal Regulations, 24 CFR Part 982, Section 8 Tenant-Based Assistance: Housing Choice Voucher Program: 24 CFR 982.503 requires PHA payment standards between 90% and 110% of FMR; 982.507 prohibits charging voucher tenants more than comparable unassisted tenants; tenant share cannot exceed 40% of adjusted income at move-in.
- HUD Office of Policy Development and Research, FY2023 Fair Market Rents Documentation: HUD's FY2023 FMRs rose an average of roughly 10% nationally, with some metros seeing increases of 20% or more, reflecting post-pandemic rent growth.
- HUD, Housing Choice Voucher Landlord Information: Units must pass Housing Quality Standards inspection and rent must pass rent reasonableness determination before PHA approves a voucher lease.
- National Low Income Housing Coalition, Out of Reach Report: NLIHC publishes the annual Housing Wage, the hourly wage needed to afford the two-bedroom FMR at 30% of income, updated each year using HUD FMR data.
- U.S. Census Bureau, American Community Survey: HUD uses ACS five-year and one-year estimates as the primary data source for FMR calculations.
- HUD User, FY2025 Fair Market Rents Data: FY2025 two-bedroom FMRs in the 50 largest metros ranged from approximately $1,100 to over $3,000 depending on location.