What is Fair Market Rent, and how does HUD set it?

Fair Market Rent is HUD's yearly estimate of what a modest rental costs in an area. It's the baseline for Section 8 voucher payment standards.

FY2026 · Section8HQ editorial team · Educational information, not legal or housing advice

Fair Market Rent (FMR) is an estimate, published every year by the U.S. Department of Housing and Urban Development (HUD), of what it costs to rent a modest, decent home in a given area. There is a separate FMR for each unit size, from a studio (0-bedroom) up to 4 bedrooms.

How HUD calculates it

HUD generally sets the FMR at about the 40th percentile of gross rents for standard-quality units that have been rented recently — meaning roughly 40% of comparable units rent for less, and 60% rent for more. (A handful of high-cost areas use the 50th percentile.) FMR is a gross rent figure: it is meant to cover the rent plus the cost of tenant-paid utilities, except telephone, cable, and internet.

The data comes mainly from the Census Bureau's American Community Survey, adjusted forward for rent inflation. HUD publishes a new set each federal fiscal year, effective October 1.

What FMR is used for

• Section 8 Housing Choice Vouchers — FMR is the basis for the payment standard, the cap on how much a voucher pays.
• Other HUD programs, including some project-based rental assistance and special-purpose vouchers.
• A general benchmark landlords and investors use to gauge rents in an area.

FMR is an area figure, not your rent

FMR describes a whole market area (a metro or a non-metro county), so it won't match any single apartment exactly. In many large metros, HUD also publishes Small Area FMRs calculated for each ZIP code, which track neighborhood rents far more closely than one metro-wide number.

Look up the current FMR for any U.S. location with our Fair Market Rent tool.

Frequently asked questions

Is Fair Market Rent the maximum a landlord can charge?

No. FMR is HUD's market estimate, not a legal rent cap. For a voucher tenant, the relevant cap is the housing authority's payment standard (usually 90–110% of FMR) plus a rent-reasonableness review. Outside the voucher program, FMR does not limit what you can charge.

How often does Fair Market Rent change?

HUD publishes new FMRs every federal fiscal year, effective October 1. Housing authorities then update their payment standards within HUD's allowed range.

Does FMR include utilities?

Yes. FMR is a 'gross rent' figure intended to cover rent plus tenant-paid utilities, excluding telephone, cable, and internet. Housing authorities apply a utility allowance to account for this.