The 3-Bedroom FMR for Montgomery County, MO is computed as a function of the ratio of the 2010 5-Year 3-Bedroom American Community Survey Rent to the 2010 5-Year 2-Bedroom American Community Survey Rent. This 3-Bedroom Rent Ratio is applied to the Final FY 2014 2-Bedroom FMR to determine the 3-Bedroom FMR.
The tables below provide the relevant steps for computing the Final FY 2014 3-Bedroom FMR:
Check the Margin of Error Ratios for Montgomery County, MO. 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 Montgomery County, MO for which there is acceptable data.
| Check Margin of Error Ratios for Montgomery County, MO | ||||||
|---|---|---|---|---|---|---|
| Area | 2006-2010 5-Year ACS 3-Bedroom Adjusted Standard Quality Rent Estimate | 2006-2010 5-Year ACS 3-Bedroom Adjusted Standard Quality Rent Margin of Error | 3-Bedroom 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 |
| Montgomery County, MO | $590 | $31 | $31 / $590 = 0.053 | $509 | $69 | $69 / $509 = 0.136 |
The smallest geographic area for which both Margin of Error Ratios can be computed and are less than 1 is Montgomery County, MO.
The Preliminary 3-Bedroom Rent Ratio for Montgomery County, MO is caluclated by dividing the 2006-2010 5-Year ACS 3-Bedroom Adjusted Standard Quality Rent Estimate for Montgomery County, MO by the 2006-2010 5-Year ACS 2-Bedroom Adjusted Standard Quality Rent Estimate for Montgomery County, MO.
| Preliminary Computation of 3-Bedroom Rent Ratio for Montgomery County, MO | ||
|---|---|---|
| 2006-2010 5-Year ACS 3-Bedroom Adjusted Standard Quality Rent Estimate | 2006-2010 5-Year ACS 2-Bedroom Adjusted Standard Quality Rent Estimate | Preliminary 3-Bedroom Rent Ratio |
| $590 | $509 | $590 / $509 = 1.159 |
The Preliminary 3-Bedroom 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 | |||
|---|---|---|---|
| Montgomery County, MO Preliminary 3-Bedroom Rent Ratio | 3-Bedroom Rent Ratio Floor | 3-Bedroom Rent Ratio Cap | Montgomery County, MO Preliminary 3-Bedroom Rent Ratio |
| 1.159 | 1.146 | 1.356 | Ratio of 1.159 is subject to neither caps nor floors |
In order to more easily house large families, 3-Bedroom Rent Ratios receive an additional 8.7 percent increase, per HUD regulation.
| 3-Bedroom Rent Bonus | ||
|---|---|---|
| Montgomery County, MO Preliminary 3-Bedroom Rent Ratio | 3-Bedroom Rent Bonus | Montgomery County, MO Preliminary 3-Bedroom Rent Ratio |
| 1.159 | 1.087 | 1.159 * 1.087 = 1.260 |
Multiply the 3-Bedroom Rent Ratio by the 2-Bedroom Fair Market Rent to determine the 3-Bedroom Fair Market Rent for Montgomery County, MO.
| Final Computation of 3-Bedroom FMR for Montgomery County, MO | ||
|---|---|---|
| Final 3-Bedroom Rent Ratio | Final FY 2014 2-Bedroom FMR | Final FY 2014 3-Bedroom FMR |
| 1.260 | $627 | $627 * 1.260 = $790 |
Prepared by the Economic and Market Analysis Division, HUD. Technical Problems or questions? Contact Us.