HUD publishes final rule on small area FMRs

Yesterday the Department of Housing and Urban Development (HUD) published in the Federal Register a final rule on the use of small area fair market rents (SAFMRs) in the housing choice voucher (HCV) program.

The rule, which is intended to help reduce the number of assisted families that reside in areas of high poverty concentration, requires the use of SAFMRs in certain metropolitan areas if the area meets a specific set of criteria. It changes the geography used to calculate FMRs in certain areas from a metropolitan area-wide approach to the zip code level, expanding the options of families to live in lower poverty neighborhoods.

In a notice published today in conjunction with the rule, HUD lists the 24 areas required to implement SAFMRs, and discusses several key changes made from the rule proposed in June of this year. These changes include:

• The addition of three payment standard reduction protections
• Additional criteria for selecting SAFMR areas
• The exemption of project-based vouchers (PBVs) except in certain conditions
• Additional changes to reduce the administrative burden on PHAs and simplify the transition

HUD’s Office of Policy Development and Research (PD&R) established a website earlier this year containing tools and information on the use of SAFMRs in the HCV program. To accompany the final rule, HUD has posted links to several supplementary documents on this website, including today’s press release on the rule, the key aspects notice mentioned above, and second Federal Register notice on SAFMRs, also published this morning, which sets the values for the selection criteria used to determine areas subject to small area FMRs, and lists the areas meeting these requirements. The rule becomes effective on January 17, 2017.