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FY 2018 Fair Market Rent Documentation System

The $fmrtype$ FY 2018 FMRs for All Bedroom Sizes

The following table shows the $fmrtype$ FY 2018 FMRs by unit bedrooms for .

$fmrtype$ FY 2018 FMRs By Unit Bedrooms
Efficiency One-Bedroom Two-Bedroom Three-Bedroom Four-Bedroom

FY 2018 FMR areas continue to use the revised Office of Management and Budget (OMB) area definitions that were first issued in 2003 along with HUD defined Metropolitan areas (HMFAs) as described in the FY2011 FMR documentation, which can be found at ( FY2011 FMR Documentation system). No changes have been made to these OMB-defined areas since the publication of Final FY2011 FMRs

Fair Market Rent Calculation Methodology

Show/Hide Methodology Narrative

Fair Market Rents for metropolitan areas and non-metropolitan FMR areas are developed as follows:

  1. 2011-2015 5-year American Community Survey (ACS) estimates of 2-bedroom adjusted standard quality gross rents calculated for each FMR area are used as the new basis for FY2018.

    In areas where the 2011-2015 5-year ACS 2-bedroom adjusted standard quality gross rent estimate is less than its respective margin of error, the state non-metro estimate of 2-bedroom adjusted standard quality gross rent is used.

  2. HUD calculates a recent mover adjustment factor by comparing a 2015 1-year 40th percentile recent mover 2-bedrooom rent to the 2011-2015 5-year 40th percentile adjusted standard quality gross rent. If either the recent mover and non-recent mover rent estimates has a margin of error that includes zero, HUD uses the recent mover adjustment for a larger geography. For metropolitan areas, the order of geographies examined is: FMR Area, Entire Metropolitan Area (for Metropolitan Sub-Areas), State Metropolitan Portion, Entire State, and Entire US; for non-metropolitan areas, the order of geographies examined is: FMR Area, State Non-Metropolitan Portion, Entire State, and Entire US. The recent mover adjustment factor is floored at one.
  3. HUD calculates the appropriate recent mover adjustment factor between the 5-year data and the 1-year data and applies this to the 5-year base rent estimate.
  4. Rents are calculated as of December 2012 using the relevant (regional or local) change in CPI from annual 2015 to annual 2012 as well as the change in national CPI from annual 2012 to December 2012.
  5. All estimates are then trended from December 2012 to April 2018 (15 months) with a trending factor of 2.68 percent per year.
  6. The FY2018 FMR is then calculated by multiplying the base rent, the recent mover adjustment factor, the CPI adjustment, and the trend factor.
  7. FY2018 FMRs are then compared to a state minimum rent, and any area whose preliminary FMR falls below this value is raised to the level of the state minimum.

The results of the Fair Market Rent Step-by-Step Process

  1. The following are the 2015 American Community Survey 5-year 2-Bedroom Adjusted Standard Quality Gross Rent estimate and margin of error for . The following calculations are based on data for the entirety of the OMB-defined metropolitan area of $cbsamet_name$.
    Area ACS2015 5-Year 2-Bedroom Adjusted Standard Quality Gross Rent ACS2015 5-Year 2-Bedroom Adjusted Standard Quality Gross Rent Margin of Error Ratio Result
    N/A N/A N/A Check ACS2014 Base Rent Basis
    Since the ACS2015 estimate of 2-Bedroom Adjusted Standard Quality Gross Rent does not pass the margin of error test, the ACS2014 Base Rent is examined to see if a local value was used for the calculation of the FY2017 FMR:
    Area FY2017 Base Rent Basis FY2017 Base Rent
    Local Estimate
    Since a ACS2014 local value was used as the FY2012 Base Rent, this value is retained for the FY2018 Base Rent Rent. It is multiplied by the ratio of the ACS2015 5-Year State Non-Metro 2-Bedroom Adjusted Standard Quality Gross Rent to the ACS2014 5-Year State Non-Metro 2-Bedroom Adjusted Standard Quality Gross Rent to update the figure to 2015.
    Area ACS2014 Base Rent ACS2014 State Non-Metro 5-Year 2-Bedroom Adjusted Standard Quality Gross Rent ACS2015 State Non-Metro 5-Year 2-Bedroom Adjusted Standard Quality Gross Rent FY2018 Base Rent
    * ( / )= *

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    =

  2. A recent mover adjustment factor is applied based on the smallest area of geography which contains and has an ACS2015 1-year Adjusted Standard Quality Recent-Mover estimate with a Margin of Error Ratio that is less than 1.
    Area ACS2015 1-Year 2-Bedroom Adjusted Standard Quality Recent-Mover Gross Rent ACS2015 1-Year 2-Bedroom Adjusted Standard Quality Recent-Mover Gross Rent Margin of Error Ratio Result
    / = < 1 Use ACS2015 1-Year 2-Bedroom Adjusted Standard QualityRecent-Mover Gross Rent
    $statename$ Metro N/A N/A N/A No ACS2015 1-year Adjusted Standard QualityRecent-Mover estimate produced for$statename$ Metro
    State N/A N/A N/A No ACS2015 1-year Adjusted Standard QualityRecent-Mover estimate produced for $statename$

    The smallest area of geography which contains and has an ACS2015 1-year Adjusted Standard Quality Recent-Mover estimate with a Margin of Error Ratio that is less than 1 is .

  3. The calculation of the relevant Recent-Mover Adjustment Factor for is as follows:
    ACS2015 5-Year Area ACS2015 5-Year 40th Percentile 2-Bedroom Adjusted Standard Quality Gross Rent ACS2015 1-Year 40th Percentile 2-Bedroom Adjusted Standard Quality Recent-Mover Gross Rent
    Area Ratio Recent-Mover Adjustment Factor
    /
    =

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    < 1.0 Recent-Mover Adjustment Factor floored at 1.0

  4. The calculation of the relevant CPI Update Factors for is as follows: HUD updates the 2015 intermediate rent with the ratio of the annual 2016 local or regional CPI to the annual 2015 local or regional CPI to establish rents as of 2016. HUD then updates this 2016 annual CPI with the ratio of the December 2016 national CPI to the annual 2015 national CPI to establish rents as of December 2016.
    Update Factor Type
    CPI Update Factor

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    1.0067

    Regional CPI
  5. The calculation of the Trend Factor is as follows: HUD applies an additional 15 months of trending to update rents to April, 2018, the mid-point of FY 2018. This trend factor is determined by taking the average annual growth rate in the national 1-Year Median Gross Rent between the 2011 and 2015 American Community Surveys.
    ACS2011U.S. 1-Year Median Gross Rent ACS2015U.S. 1-Year Median Gross Rent Average Annual Change in U.S. 1-Year Median Gross Rent Trend Factor 2.68% for 1.25 years
    $763 $871 ($871 / $763) 1/5=(1.1415) 1/5=1.0268 1.02681.25=1.03365
  6. The FY 2018 2-Bedroom Fair Market Rent for is calculated as follows:
    Area ACS2015 5-Year Estimate Recent-Mover Adjustment Factor Annual 2015 to December 2016 CPI Adjustment Trending 2.68% for 1.25 years FY 2018 2-Bedroom FMR
    1.0

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    1.0067

    1.0336 * 1.0 *

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    1.0067 * 1.0336=$1

  7. In keeping with HUD policy, the preliminary FY 2018 FMR is checked to ensure that is does not fall below the state minimum for $statename$:
    Area Preliminary FY 20182-Bedroom FMR FY 2018 $statename$ State Minimum $fmrtype$ FY 20182-Bedroom FMR
    $1 $1 ≥ Use FMR of $1

    NOTE: Due to differences in the computing platforms used to generate the official FY 2018 FMR estimates, and this web system, the calculated value of $1 is different that the official value of because of rounding.

$fmrtype$ FY 2018 Rents for All Bedroom Sizes for

The following table shows the FY 2018 FMRs by bedroom sizes. The FMRs for units with different numbers of bedrooms are computed from the ratio of the 40th percentile adjusted standard quality gross rent for the different unit sizes to the 40th percentile adjusted standard quality 2-Bedroom gross rent from the 2006-2010 5-year ACS. These Rent Ratios are applied to the FY 2018 2-Bedroom FMR to determine the FY 2018 FMRs for the different size units.

Click on the links in the table to see how the bedroom rents were derived.

$fmrtype$ FY 2018 FMRs By Unit Bedrooms
  Efficiency One-Bedroom Two-Bedroom Three-Bedroom Four-Bedroom
FY 2018 FMR

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$1

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Unadjusted Rent Ratio
State Minimum-Based $fmrtype$ FY 2018 FMR

The FMRs for unit sizes larger than four bedrooms are calculated by adding 15 percent to the four bedroom FMR, for each extra bedroom. For example, the FMR for a five bedroom unit is 1.15 times the four bedroom FMR, and the FMR for a six bedroom unit is 1.30 times the four bedroom FMR. FMRs for single-room occupancy units are 0.75 times the zero bedroom (efficiency) FMR.

Data file last updated Mon., Feb 05, 2018.

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Prepared by the Economic and Market Analysis Division, HUD. Technical Problems or questions? Contact Us.