Fair Market Rent

The 40th percentile rental rate in a specific metropolitan area, known as the Fair Market Rent (FMR), is determined by HUD (the U.S. Department of Housing and Urban Development) using data from the American Community Survey. This figure is revised annually and is a crucial benchmark in establishing payment standards for rental assistance programs, particularly HUD’s Section 8 program. To address housing cost challenges in high-cost regions, a related concept called Small Area Fair Market Rents (SAFMRs) employs the same methodology but operates at the zip-code level.

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