HUD has released the Fiscal Year 2026 Fair Market Rents (FMRs) and Small Area Fair Market Rents (SAFMRs), which are now available on their website. These new rates will take effect on October 1, 2025, unless HUD receives valid reevaluation requests for specific areas, as outlined in its August 22nd Federal Register notice. The public has until September 22nd to submit comments.
HUD is continuing to use the FMR/SAFMR calculation methodology first adopted in FY 2024, with no changes for FY 2026. Full documentation of the data and methodology used is available on the HUD FMR webpage.
For guidance on using FMRs or establishing voucher payment standards, Public Housing Agencies (PHAs) should reach out to their local HUD office or contact the Office of Public and Indian Housing Customer Service Center. Questions about how to conduct FMR surveys can be directed to HUD’s Program Parameters and Research Division at pprd@hud.gov.
Although HUD welcomes public input on FMR calculations and accepts requests for area-specific FMR reevaluations within 30 days of the annual notice, it does not have the capacity to conduct local rent surveys in response to all feedback. However, PHAs may still fund and conduct their own rent surveys using administrative fees or reserve funds, as permitted in the Federal Register notice.
Looking Ahead: Changes Proposed for FY 2027
HUD is proposing changes to the way utility and fuel costs are factored into FMRs starting in Fiscal Year 2027. The change is necessary because the Bureau of Labor Statistics (BLS) will stop publishing Consumer Price Index (CPI) data for fuels and utilities at the metro and regional levels in January 2025. This data is currently used to calculate gross rent inflation.
To adapt, HUD proposes using state-level data from the U.S. Energy Information Administration (EIA) for residential electricity, natural gas, and fuel oil prices. Additionally, national-level data from BLS would be used to measure changes in water, sewer, and trash collection costs. A composite utility inflation factor derived from these sources would replace the current utility factor used in gross rent inflation and trend projections for FMRs and SAFMRs.
HUD has published hypothetical utility inflation factors and alternative FY26 FMRs based on the proposed method. The average difference between the actual and hypothetical FMRs is less than $5, with the largest increase being $38 and the largest decrease $27 for two-bedroom units. These alternative figures are available on HUD’s FMR webpage for stakeholder review and comment.
Changes to FMR Boundaries in New England
HUD is also seeking public comment on the proposed utility factor methodology for FY 2027. In addition, HUD has revised FMR area boundaries in Connecticut to align with updated Metropolitan Statistical Area (MSA) definitions. This change follows Connecticut’s transition from county-equivalent areas (which have no governmental function) to planning regions. These planning regions now form the basis of the 2023 MSAs adopted by the Office of Management and Budget (OMB), and HUD is required to follow suit.
HUD is also asking for feedback on whether the remaining five New England states should shift to using county-based Core-Based Statistical Areas (CBSAs) for FY 2027. Historically, HUD retained older boundaries to reflect local housing market differences. However, with the availability of SAFMRs, which weren’t previously in use, HUD is reconsidering whether maintaining the old boundaries is still necessary.
