Phillips town, is in Franklin County, ME and is assigned the Efficiency FMR for that area. The Efficiency FMR for Franklin County, ME is computed as a function of the ratio of the 2010 5-Year Efficiency American Community Survey Rent to the 2010 5-Year 2-Bedroom American Community Survey Rent. This Efficiency Rent Ratio is applied to the Final FY 2014 2-Bedroom FMR to determine the Efficiency FMR.
The tables below provide the relevant steps for computing the Final FY 2014 Efficiency FMR:
Check the Margin of Error Ratios for Franklin County, ME. If either Margin of Error Ratio is greater than 1 or if there is not sufficient data to calculate the ratio, then the bedroom ratio is determined using data for the smallest geographic area encompassing Franklin County, ME for which there is acceptable data.
| Check Margin of Error Ratios for Franklin County, ME | ||||||
|---|---|---|---|---|---|---|
| Area | 2006-2010 5-Year ACS Efficiency Adjusted Standard Quality Rent Estimate | 2006-2010 5-Year ACS Efficiency Adjusted Standard Quality Rent Margin of Error | Efficiency Margin of Error Ratio | 2006-2010 5-Year ACS 2-Bedroom Adjusted Standard Quality Rent Estimate | 2006-2010 5-Year ACS 2-Bedroom Adjusted Standard Quality Rent Margin of Error | 2-Bedroom Margin of Error Ratio |
| Franklin County, ME | $516 | $40 | $40 / $516 = 0.078 | $589 | $35 | $35 / $589 = 0.059 |
The smallest geographic area for which both Margin of Error Ratios can be computed and are less than 1 is Franklin County, ME.
The Preliminary Efficiency Rent Ratio for Franklin County, ME is caluclated by dividing the 2006-2010 5-Year ACS Efficiency Adjusted Standard Quality Rent Estimate for Franklin County, ME by the 2006-2010 5-Year ACS 2-Bedroom Adjusted Standard Quality Rent Estimate for Franklin County, ME.
| Preliminary Computation of Efficiency Rent Ratio for Franklin County, ME | ||
|---|---|---|
| 2006-2010 5-Year ACS Efficiency Adjusted Standard Quality Rent Estimate | 2006-2010 5-Year ACS 2-Bedroom Adjusted Standard Quality Rent Estimate | Preliminary Efficiency Rent Ratio |
| $516 | $589 | $516 / $589 = 0.876 |
The Preliminary Efficiency Rent Ratio is checked against the caps and floors for that bedroom size. The floor is set at the 10th percentile of the national distribution of geographic areas with at least 100 2006-2010 5-Year ACS Adjusted Standard Quality observations, while the cap is set at the 90th percentile of the same distribution.
| Check Caps and Floors | |||
|---|---|---|---|
| Franklin County, ME Preliminary Efficiency Rent Ratio | Efficiency Rent Ratio Floor | Efficiency Rent Ratio Cap | Franklin County, ME Preliminary Efficiency Rent Ratio |
| 0.876 | 0.595 | 0.808 | 0.876 is greater than cap of 0.808 Set preliminary ratio to 0.808 |
In order to ensure that Efficiency Fair Market Rents are not greater than the corresponding 1-Bedroom Fair Market Rent, the Efficiency Rent Ratio must be at least 0.005 less than the corresponding 1-Bedroom Rent Ratio.
| Efficiency Rent Ratio Consistency Check | ||
|---|---|---|
| Franklin County, ME Preliminary Efficiency Rent Ratio | Franklin County, ME 1-Bedroom Rent Ratio | Efficiency Rent Ratio Comparison |
| 0.808 | 0.843 | 0.808 <= (0.843 - 0.005) 0.808 <= 0.838 Keep efficiency preliminary rent ratio |
Multiply the Efficiency Rent Ratio by the 2-Bedroom Fair Market Rent to determine the Efficiency Fair Market Rent for Franklin County, ME.
| Final Computation of Efficiency FMR for Franklin County, ME | ||
|---|---|---|
| Final Efficiency Rent Ratio | Final FY 2014 2-Bedroom FMR | Final FY 2014 Efficiency FMR |
| 0.808 | $663 | $663 * 0.808 = $536 |
Prepared by the Economic and Market Analysis Division, HUD. Technical Problems or questions? Contact Us.