Fair Market Rent Calculation Methodology
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Fair Market Rents for metropolitan areas and nonmetropolitan FMR areas are developed as follows:
20102014 5year American Community Survey (ACS) estimates of 2bedroom adjusted standard quality gross rents calculated for each FMR area are used as the new basis for FY2017 provided the estimate is statistically reliable. For FY2017, the test for reliability is whether the margin of error for the estimate is less than 50% of the estimate itself.
If an area does not have a reliable 20102014 5year, HUD checks whether the area has had a reliable estimate in any of the past 5 years. If so, the most recent reliable estimate is updated by the change in the area's corresponding State metropolitan or nonmetropolitan area from the year of the most recent reliable estimate to 2010. This update value becomes the basis for FY2017.
If an area has not had a reliable estimate in the past 5 years, the estimate State for the area's corresponding metropolitan area (if applicable) or State nonmetropolitan area is used as the basis for FY2017.
HUD calculates a recent mover adjustment factor by comparing a 2014 1year 40th percentile recent mover 2bedroom rent to the 20102014 5year 40th percentile adjusted standard quality gross rent. If either the recent mover and nonrecent mover rent estimates are not reliable, 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 SubAreas), State Metropolitan Portion, Entire State, and Entire US; for nonmetropolitan areas, the order of geographies examined is: FMR Area, State NonMetropolitan Portion, Entire State, and Entire US. The recent mover adjustment factor is floored at one.
HUD calculates the appropriate recent mover adjustment factor between the 5year data and the 1year data and applies this to the 5year base rent estimate.
Rents are calculated as of 2015 using the relevant (regional or local) change in gross rent Consumer Price Index (CPI) from annual 2014 to annual 2015.
All estimates are then inflated from 2015 to FY2017 using a national trend factor based on the forecast of gross rent changes through FY2017.
FY2017 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 StepbyStep Process

The following are the 2014 American Community Survey 5year 2Bedroom Adjusted Standard Quality Gross Rent estimate and margin of error for DenverAuroraLakewood, CO MSA.
Area ACS_{2014} 5Year 2Bedroom Adjusted Standard Quality Gross Rent ACS_{2014} 5Year 2Bedroom Adjusted Standard Quality Gross Rent Margin of Error Ratio Result DenverAuroraLakewood, CO MSA $1,032 $8 $8 / $1,032=0.008 0.008 < .5
Use ACS_{2014} 5Year DenverAuroraLakewood, CO MSA 2Bedroom Adjusted Standard Quality Gross RentArea ACS_{2014} Rent DenverAuroraLakewood, CO MSA $1,032 
A recent mover adjustment factor is applied based on the smallest area of geography which contains DenverAuroraLakewood, CO MSA and has an ACS_{2014} 1year Adjusted Standard Quality RecentMover estimate with a Margin of Error Ratio that is less than .5.
Area ACS_{2014} 1Year Adjusted Standard Quality RecentMover Gross Rent ACS_{2014} 1Year Adjusted Standard Quality RecentMover Gross Rent Margin of Error Ratio Result DenverAuroraLakewood, CO MSA – 2 Bedroom $1,085 $22 0.02 0.02 < .5
Use ACS_{2014} 1Year DenverAuroraLakewood, CO MSA 2Bedroom Adjusted Standard Quality RecentMover Gross RentThe smallest area of geography which contains DenverAuroraLakewood, CO MSA and has an ACS_{2014} 1year Adjusted Standard Quality RecentMover estimate with a Margin of Error Ratio that is less than .5 is DenverAuroraLakewood, CO MSA.
 The calculation of the relevant RecentMover Adjustment Factor for DenverAuroraLakewood, CO MSA is as follows:
ACS_{2014} 5Year Area ACS_{2014} 5Year 40th Percentile Adjusted Standard Quality Gross Rent ACS_{2014} 1Year 40th Percentile Adjusted Standard Quality RecentMover Gross Rent DenverAuroraLakewood, CO MSA – 2 Bedroom $956 $1,085 Although the DenverAuroraLakewood, CO MSA is a 50^{th} percentile area for 2017, the RecentMover Adjustment Factor is based on 40^{th} percentile rents in order to maintain consistency across calculations.
Area Ratio RecentMover Adjustment Factor DenverAuroraLakewood, CO MSA $1,085 / $956
=1.1351.135 ≥ 1.0 Use calculated RecentMover Adjustment Factor of 1.135 
The calculation of the relevant CPI Update Factors for DenverAuroraLakewood, CO MSA is as follows:
HUD updates the 2014 intermediate rent with the ratio of the annual 2015 local or regional CPI to the annual 2014 local or regional CPI to establish rents as of 2015.
Update Factor Type CPI Update Factor 1.0581 Local CPI 
The calculation of the Trend Factor is as follows: HUD forecasts the change in national gross rents from 2015 to 2017. This makes Fair Market Rents "as of" FY2017.
National Trend Factor 1.0531  The FY 2017 2Bedroom Fair Market Rent for DenverAuroraLakewood, CO MSA is calculated as follows:
Area ACS_{2014} 5Year Estimate RecentMover Adjustment Factor Annual 2014 to 2015 CPI Adjustment Trending 1.0531 to FY2017 FY 2017 2Bedroom FMR DenverAuroraLakewood, CO MSA $1,032 1.135 1.0581 1.0531 $1,032 * 1.135 * 1.0581 * 1.0531=$1,305 
In keeping with HUD policy, the preliminary FY 2017 FMR is checked to ensure that is does not fall below the state minimum.
Area Preliminary FY2017 2Bedroom FMR FY 2017 Colorado State Minimum Final FY2017 2Bedroom FMR DenverAuroraLakewood, CO MSA $1,305 $681 $1,305 ≥ $681 Use DenverAuroraLakewood, CO MSA FMR of $1,305
Final FY2017 Rents for All Bedroom Sizes for DenverAuroraLakewood, CO MSA
The following table shows the Final FY 2017 FMRs by bedroom sizes.
Click on the links in the table to see how the bedroom rents were derived.
Final FY 2017 FMRs By Unit Bedrooms  

Efficiency  OneBedroom  TwoBedroom  ThreeBedroom  FourBedroom  
Final FY 2017 FMR  $844  $1,031  $1,305  $1,896  $2,196 
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 singleroom occupancy units are 0.75 times the zero bedroom (efficiency) FMR.