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FY 2016 Fair Market Rent Documentation System

The $fmrtype$ FY 2016 FMRs for All Bedroom Sizes

The following table shows the $fmrtype$ FY 2016 FMRs by unit bedrooms for .

$fmrtype$ FY 2016 FMRs By Unit Bedrooms
Efficiency One-Bedroom Two-Bedroom Three-Bedroom Four-Bedroom

FY 2016 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). Although OMB issued new Metropolitan area definitions in February 2013, the Census Bureau did not incorporate these definitions into the 2012 American Community Survey (ACS) data. 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. 2009-2013 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 FY2016.

    In areas where the 2009-2013 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 2013 1-year 40th percentile recent mover 2-bedrooom rent to the 2009-2013 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 2014 using the relevant (regional or local) change in CPI from annual 2013 to annual 2014 as well as the change in national CPI from annual 2014 to December 2014.
  5. All estimates are then trended from December 2014 to April 2016 (15 months) with a trending factor of 2.2999% per year.
  6. The FY2016 FMR is then calculated by multiplying the base rent, the recent mover adjustment factor, the CPI adjustment, and the trend factor.
  7. FY2016 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 2013 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 ACS2013 5-Year 2-Bedroom Adjusted Standard Quality Gross Rent ACS2013 5-Year 2-Bedroom Adjusted Standard Quality Gross Rent Margin of Error Ratio Result
    N/A N/A N/A Check ACS2012 Base Rent Basis
    Since the ACS2013 estimate of 2-Bedroom Adjusted Standard Quality Gross Rent does not pass the margin of error test, the ACS2012 Base Rent is examined to see if a local value was used for the calculation of the FY2015 FMR:
    Area FY2015 Base Rent Basis FY2015 Base Rent
    Local Estimate
    Since a ACS2012 local value was used as the FY2012 Base Rent, this value is retained for the FY2016 Base Rent Rent. It is multiplied by the ratio of the ACS2013 5-Year State Non-Metro 2-Bedroom Adjusted Standard Quality Gross Rent to the ACS2012 5-Year State Non-Metro 2-Bedroom Adjusted Standard Quality Gross Rent to update the figure to 2013.
    Area ACS2012 Base Rent ACS2012 State Non-Metro 5-Year 2-Bedroom Adjusted Standard Quality Gross Rent ACS2013 State Non-Metro 5-Year 2-Bedroom Adjusted Standard Quality Gross Rent FY2016 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 ACS2013 1-year Adjusted Standard Quality Recent-Mover estimate with a Margin of Error Ratio that is less than 1.
    Area ACS2013 1-Year 2-Bedroom Adjusted Standard Quality Recent-Mover Gross Rent ACS2013 1-Year 2-Bedroom Adjusted Standard Quality Recent-Mover Gross Rent Margin of Error Ratio Result
    / = < 1 Use ACS2013 1-Year 2-Bedroom Adjusted Standard Quality Recent-Mover Gross Rent
    Metro N/A N/A N/A No ACS2013 1-year Adjusted Standard Quality Recent-Mover estimate produced for Metro
    State N/A N/A N/A No ACS2013 1-year Adjusted Standard Quality Recent-Mover estimate produced for

    The smallest area of geography which contains and has an ACS2013 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:
    ACS2013 5-Year Area ACS2013 5-Year 40th Percentile 2-Bedroom Adjusted Standard Quality Gross Rent ACS2013 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 2013 intermediate rent with the ratio of the annual 2014 local or regional CPI to the annual 2013 local or regional CPI to establish rents as of 2014. HUD then updates this 2014 annual CPI with the ratio of the December 2014 national CPI to the annual 2013 national CPI to establish rents as of December 2014.
    Update Factor Type
    CPI Update Factor

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    1.007

    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, 2016, the mid-point of FY 2016. This trend factor is determined by taking the average annual growth rate in the national 1-Year Median Gross Rent between the 2008 and 2013 American Community Surveys.
    ACS2008U.S. 1-Year Median Gross Rent ACS2013U.S. 1-Year Median Gross Rent Average Annual Change in U.S. 1-Year Median Gross Rent Trend Factor 2.2999% for 1.25 years
    $789 $884 ($884 / $789) 1/5=(1.1204) 1/5=1.022999 1.0229991.25=1.028831
  6. The FY 2016 2-Bedroom Fair Market Rent for is calculated as follows:
    Area ACS2013 5-Year Estimate Recent-Mover Adjustment Factor Annual 2013 to December 2014 CPI Adjustment Trending 2.2999% for 1.25 years FY 2016 2-Bedroom FMR
    1.0

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    1.007

    1.0288 * 1.0 *

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    1.0070 * 1.0288=$1

  7. In keeping with HUD policy, the preliminary FY 2016 FMR is checked to ensure that is does not fall below the state minimum for :
    Area Preliminary FY 20162-Bedroom FMR FY 2016 State Minimum $fmrtype$ FY 20162-Bedroom FMR
    $1 $1 ≥ Use FMR of $1

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$fmrtype$ FY 2016 Rents for All Bedroom Sizes for

The following table shows the FY 2016 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 2016 2-Bedroom FMR to determine the FY 2016 FMRs for the different size units.

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

$fmrtype$ FY 2016 FMRs By Unit Bedrooms
  Efficiency One-Bedroom Two-Bedroom Three-Bedroom Four-Bedroom
FY 2016 FMR

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$1

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Unadjusted Rent Ratio
State Minimum-Based $fmrtype$ FY 2016 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.

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