NAHMA HUD Update: HCV Guidance on recent changes in Fair Market Rent,Payment Standard, and Rent Reasonableness requirements

January 19, 2018

This week, HUD published guidance on recent changes in Fair Market rent, Payment Standard, and Rent Reasonableness requirements in the Housing Choice Voucher Program.

HUD’s notice provides guidance on the regulatory provisions implemented under the Small Area Fair Market Rent (SAFMR) Final Rule with an effective date of January 17, 2018. In November of 2016, HUD designated 24 metropolitan areas for mandatory use of the SAFMRs in establishing family payment standards (Fair Market Rents established at the zip code-area level). In August of 2017, HUD suspended the SAFMR designation for most areas; however, on December 23, 2017, a preliminary injunction was entered at a U.S. District Court to void that suspension.

This means that the mandatory use of SAFMRs is now in effect for all 24 designated SAFMR areas. HUD expects PHAs to complete the SAFRM implementation as expeditiously as possible and no later than April 1, 2018. PHAs are encouraged to contact the local HUD field offices for assistance.

In addition to affecting how FMRs are calculated in certain designated metro areas, the final rule makes changes to payment standard and rent reasonableness requirements that apply to all public housing agencies administering the HCV program, regardless of SAFMR designation and adoption. HUD will likely amend and extend this guidance once it has received the complete results of the Small Area FMR Demonstration Evaluation.  

HUD issued this guidance so PHAs can understand their options. HUD has established a set of Frequently Asked Questions (FAQ) specific to SAFMRs, attached to this email and available online here. Questions may be sent to [email protected].

To read the attached final rule online, please click here. For more information on the Small Area Fair Market Rent designation, please click here.