HUD's Fiscal Year 2026 Fair Market Rents took effect October 1, 2025 and run through September 30, 2026, with a national weighted-average increase of about 2.8% over FY2025. The core calculation did not change from prior years: HUD starts with 2019-2023 five-year American Community Survey data on two-bedroom gross rents, applies a recent-mover factor, a gross rent inflation factor, and a trend factor, then derives every other bedroom size from ratios. What did change for FY2026 was the map, not the math, plus a mid-year revision on May 21, 2026 that raised FMRs in seven markets by 6% to 20%.
This guide walks through each step of the FY2026 calculation, shows which areas were revised, and explains how a published FMR turns into the payment standard your local housing agency actually uses.
What a Fair Market Rent Is, and What It Is Not
An FMR is HUD's estimate of the 40th percentile gross rent paid by recent movers into standard-quality rental units in a given market. Three parts of that definition do most of the work:
| Term | What it means in practice |
|---|
| 40th percentile | Roughly 40% of recent-mover units rent for less than the FMR. It is deliberately below the median, not a typical or average rent. |
| Gross rent | Contract rent plus tenant-paid utilities other than telephone, cable, and internet. A $1,400 FMR does not mean $1,400 of rent to the landlord if the tenant pays electric and gas. |
| Standard quality | Units with complete plumbing and a complete kitchen, meals not included in rent, on ten acres or less. HUD also strips out the very bottom of the rent distribution using a "public housing cutoff rent" to remove likely subsidized or non-market units. |
An FMR is not a rent cap, not a rent you are entitled to, and not the number your housing agency pays. It is a program parameter that feeds payment standards, and payment standards are the number that matters at lease-up.
The FY2026 Calculation, Step by Step
HUD kept the FMR and Small Area FMR methodology it first adopted for FY2024. Here is the sequence that produced every published FY2026 number.
Step 1: Base rent from the 2019-2023 five-year ACS
HUD begins with the 2019-2023 five-year ACS estimate of the 40th percentile standard-quality two-bedroom gross rent for each FMR area. The estimate has to pass two reliability tests: the margin of error must be less than half the size of the estimate, and the estimate must rest on at least 100 survey observations.
Areas that fail fall back to an average of the three most recent years of base rents (2021, 2022, and 2023 vintages for FY2026), or, failing that, to two-bedroom data for the next largest geography: the containing metro for a metropolitan subarea, the state's nonmetropolitan portion for a rural county.
Step 2: The recent-mover factor
Five-year data averages in rents signed years ago, so HUD adjusts toward what new tenants actually pay. It compares the 2019-2023 five-year standard-quality two-bedroom rent against the 2023 one-year recent-mover gross rent. A recent mover is a household that moved in during the survey year, meaning a maximum of about 11 months in the unit.
One rule matters a lot here: the recent-mover factor can never be less than 1. If recent movers in an area paid less than the five-year average, HUD sets the factor to 1 rather than lowering the base rent. The adjustment only pushes up.
Step 3: The gross rent inflation factor
That gets HUD to a rent "as of" 2023. To move it to 2024, HUD blends two measures of rent inflation:
- Private data, weighted about 64%. Six sources: Apartment List Rent Estimate, CoStar average effective rent, Cotality single-family combined three-bedroom median rent, Moody's average market rent, RealPage average effective rent per unit, and the Zillow Observed Rent Index. An area needs at least three of the six to get a local private measure; areas with fewer get a regional average.
- CPI rent of primary residence, weighted about 36%. Local CPI for the 23 metro areas that have one, regional CPI elsewhere.
HUD set those weights by minimizing prediction error against the actual history of ACS recent-mover rent changes from 2018 through 2023. The result is then averaged with the change in the CPI housing fuels and utilities series so the figure reflects gross rent, not contract rent.
Step 4: The trend factor
Rents "as of" 2024 still are not FY2026 rents. HUD applies a trend factor built from forecasts of CPI gross rent through FY2026, using one of three time-series model types per CPI area, chosen on lowest root mean square error. HUD had planned to reassess those model selections for FY2025 but held off, reasoning that 2020-2023 rent volatility would distort long-term model performance.
Step 5: Bedroom ratios
Everything above produces one number per area: the two-bedroom FMR. Other sizes come from bedroom ratios calculated across three five-year ACS series (2017-2021, 2018-2022, and 2019-2023). HUD constrains those ratios to national interval ranges:
| Unit size | Allowed range, as a share of the two-bedroom FMR |
|---|
| Efficiency | 0.69 to 0.87 |
| One bedroom | 0.76 to 0.91 |
| Three bedroom (before adjustment) | 1.10 to 1.28 |
| Four bedroom (before adjustment) | 1.23 to 1.56 |
After the ranges are applied, HUD adds 8.7% to three-bedroom FMRs and 7.7% to four-bedroom FMRs, a deliberate policy choice meant to help large families, who have the hardest time leasing up. Units above four bedrooms add 15% per extra bedroom, so a five-bedroom FMR is 1.15 times the four-bedroom and a six-bedroom is 1.30 times. Single-room occupancy units are set at 0.75 times the efficiency FMR.
Step 6: Floors and the limit on decreases
Two guardrails finish the job. Every area's two-bedroom FMR must be at least the lower of its state nonmetropolitan median rent or the national nonmetropolitan rent, which for FY2026 is $973. And under 24 CFR 888.113, no FMR may fall below 90% of the prior year's FMR for the same bedroom size. When that floor binds, the housing agency can point to the "unfloored" rents in HUD's documentation system and request a payment standard below the normal range.
FY2026 Two-Bedroom FMRs in Large Metros
These are published FY2026 figures from HUD's FMR file. Los Angeles reflects the May 21, 2026 revision.
| Metro area | FY2026 two-bedroom FMR |
|---|
| San Francisco, CA HMFA | $3,604 |
| Boston-Cambridge-Quincy, MA-NH HMFA | $2,941 |
| New York, NY HMFA | $2,910 |
| Los Angeles-Long Beach-Glendale, CA HMFA (revised) | $2,903 |
| Seattle-Bellevue, WA HMFA | $2,501 |
| Miami-Miami Beach-Kendall, FL HMFA | $2,436 |
| Washington-Arlington-Alexandria, DC-VA-MD HMFA | $2,246 |
| Denver-Aurora-Centennial, CO MSA | $2,089 |
| Dallas, TX HMFA | $1,931 |
| Phoenix-Mesa-Chandler, AZ MSA | $1,839 |
| Atlanta-Sandy Springs-Roswell, GA HMFA | $1,820 |
| Philadelphia-Camden-Wilmington, PA-NJ-DE-MD MSA | $1,810 |
| Chicago-Joliet-Naperville, IL HMFA | $1,781 |
| Las Vegas-Henderson-North Las Vegas, NV MSA | $1,735 |
| Houston-The Woodlands-Sugar Land, TX HMFA | $1,573 |
| Detroit-Warren-Livonia, MI HMFA | $1,411 |
Across all 4,764 county and county-equivalent records in HUD's FY2026 file, the population-weighted average two-bedroom FMR is roughly $1,716, while the unweighted median county sits near $1,224. The spread runs from $475 to $4,214. That gap is the whole reason FMRs are set locally rather than nationally.
For how FY2025 FMRs compared against what apartments actually rented for city by city, see our FY2025 fair market rent vs actual rent breakdown. For where these numbers are heading next, see the FY2027 FMR projections.
What Actually Changed for FY2026
The arithmetic held steady. Three things did not.
Redrawn FMR areas in Connecticut and Puerto Rico. Connecticut replaced its county governments with nine planning regions and the federal government adopted those as county equivalents, so HUD adopted the new Connecticut MSA definitions rather than keeping old town-based boundaries. HUD also designated some single-municipio areas in Puerto Rico to reduce year-to-year swings.
Two mandatory Small Area FMR boundaries moved. Calvert County, Maryland came out of the Washington-Arlington-Alexandria HMFA, and Bristol, Burlington, Hartland, and Union came out of the Hartford-West Hartford-East Hartford, CT HMFA. Agencies in those places still have to use SAFMRs. Eight towns were newly added to the Hartford MSA (Clinton, Deep River, Essex, Killingworth, Lyme, Old Lyme, Old Saybrook, and Westbrook), and agencies operating there must align their payment standards with SAFMRs by January 1, 2027.
A proposed change to the utility inflation factor for FY2027. The Bureau of Labor Statistics discontinued CPI fuels and utilities data at the metro and regional level starting January 2025, which breaks an input HUD needs. HUD proposed a substitute composite built from state-level Energy Information Administration data on electricity, natural gas, and fuel oil, plus national BLS data on water, sewer, and trash. HUD ran the proposed method against FY2026 as a test: the average absolute difference was under $5, with a maximum two-bedroom increase of $38 and a maximum decrease of $27. Small in aggregate, but real in specific markets.
The Seven Areas HUD Revised Mid-Year
HUD received 21 comments on the FY2026 FMRs. Thirteen were reevaluation requests covering 15 areas. HUD found 11 of those requests valid, and 7 of those markets went on to fund and submit the required local rental market survey. The revised numbers published April 21, 2026 and took effect May 21, 2026.
| Area | Original FY2026 two-bedroom FMR | Revised | Change |
|---|
| Napa, CA MSA | $2,773 | $3,315 | +19.5% |
| Asheville, NC HMFA | $1,567 | $1,835 | +17.1% |
| Transylvania County, NC | $1,164 | $1,363 | +17.1% |
| Albany, OR MSA | $1,500 | $1,695 | +13.0% |
| Corvallis, OR MSA | $1,622 | $1,824 | +12.5% |
| Los Angeles-Long Beach-Glendale, CA HMFA | $2,601 | $2,903 | +11.6% |
| San Luis Obispo-Paso Robles, CA MSA | $2,512 | $2,671 | +6.3% |
Every one of those increases came from a local survey a housing agency paid for out of its own administrative fees, not from HUD finding an error. That is the reevaluation process working as designed, and it is also the clearest evidence that ACS-based FMRs lag fast-moving markets. One commenter asked HUD to update FMRs quarterly or semiannually in volatile markets. HUD declined, noting there is no nationwide alternative to the ACS that measures the 40th percentile recent-mover rent its regulations require.
How an FMR Becomes Your Payment Standard
This is the step most people skip, and it is the step that determines what you can actually rent.
- HUD publishes the FMR. For FY2026 that was August 22, 2025, effective October 1, 2025.
- Your housing agency sets a payment standard between 90% and 110% of the FMR. That range is the "basic range" under 24 CFR 982.503 and needs no HUD approval. On a $1,800 FMR the band runs $1,620 to $1,980. Agencies can pick different percentages for different bedroom sizes.
- The agency has three months to revise. If a new FMR pushes the current payment standard outside the basic range, the agency must fix it no later than three months after the FMR effective date. For FY2026 that deadline was January 1, 2026.
- Exception payment standards can exceed 110%. Agencies may request exception payment standard areas, and HUD explicitly points agencies toward exceptions, voluntary Small Area FMR use, and reevaluations when an area-wide FMR is running low.
- Your share is calculated from the payment standard, not the FMR. In general a voucher household pays about 30% of adjusted monthly income toward rent and utilities. At initial lease-up, if the unit's gross rent exceeds the payment standard, your share cannot exceed 40% of adjusted monthly income.
- New standards usually apply at your next annual recertification, not in the middle of an active lease.
The practical move: ask your housing agency for its current payment standard schedule in writing. The published FMR tells you very little on its own, because two agencies operating in the same FMR area can be paying standards that differ by 20%.
Small Area FMRs in FY2026
In mandatory SAFMR metros, payment standards are set from ZIP-code-level rents instead of one metro-wide number. HUD calculates a two-bedroom equivalent 40th percentile gross rent for each ZIP Code Tabulation Area with reliable data, averaging the 2021, 2022, and 2023 vintages of the five-year ACS. ZIPs without usable data get a rent ratio derived from median gross rents, or from neighboring ZIPs when at least half of them have reliable data.
One cap to know: a two-bedroom Small Area FMR can be no more than 150% of the two-bedroom FMR for the containing metro. In the priciest ZIPs, the SAFMR hits that ceiling and stops. Agencies outside mandatory areas may adopt SAFMRs voluntarily, and HUD treats that as a low-burden fix for an FMR running below the market.
Frequently Asked Questions
What is the Fair Market Rent for 2026?
It depends on your county or metro area. The FY2026 population-weighted average two-bedroom FMR is roughly $1,716, but published values range from $475 to $4,214 depending on the area. The national nonmetropolitan floor is $973. Look up your exact area in HUD's FY2026 FMR documentation system at huduser.gov.
When do the FY2026 Fair Market Rents expire?
FY2026 FMRs are effective October 1, 2025 through September 30, 2026. FY2027 FMRs replace them on October 1, 2026. Because housing agencies get three months to revise payment standards, the FY2026 numbers keep influencing payment standards into late 2026.
Did HUD change the FMR formula for 2026?
No. HUD used the same FMR and Small Area FMR methodology adopted for FY2024. The FY2026 changes were to FMR area boundaries in Connecticut and Puerto Rico, two mandatory SAFMR boundaries, and a proposal for a new utility inflation factor that would start with FY2027.
Why did my FMR go up so much less than local rents?
Two structural reasons. The base data is a five-year ACS series ending in 2023, so it averages in leases signed years before the current market. And FMRs target the 40th percentile, which sits below the median by design. HUD's inflation and trend factors close part of that gap but not all of it, which is why reevaluation surveys in fast-moving markets often produce double-digit increases.
Can my housing agency pay more than the Fair Market Rent?
Yes. Payment standards run from 90% to 110% of the FMR with no HUD approval needed, and agencies can request exception payment standard areas above 110%. Agencies in mandatory Small Area FMR metros set standards from ZIP-level rents, which in higher-rent ZIPs can reach up to 150% of the metro-wide two-bedroom FMR.
What is the difference between an FMR and a payment standard?
The FMR is HUD's published estimate of local rents. The payment standard is the maximum subsidy amount your local housing agency actually uses to calculate assistance, chosen from a range around the FMR. Your rent portion is calculated against the payment standard, so that is the number to ask your agency for.
How does a housing agency get its FMR changed?
Through HUD's reevaluation process. An agency comments during the open period after the annual FMR notice, then funds and submits a local rental market survey meeting HUD's guidelines. For FY2026, 13 requests came in covering 15 areas, 11 were found valid, and 7 markets completed surveys and received revised FMRs effective May 21, 2026. Survey costs are an eligible use of voucher administrative fees.
Do Fair Market Rents affect programs other than Section 8 vouchers?
Yes. FMRs set rent limits and cost parameters for the Moderate Rehabilitation Single Room Occupancy program, project-based Section 8 contract renewals, the HOME Investment Partnerships Program, Emergency Solutions Grants, and Continuum of Care rental assistance, among others.
Sources
- HUD, Fair Market Rents for the Housing Choice Voucher Program, Moderate Rehabilitation Single Room Occupancy Program, and Other Programs Fiscal Year 2026, 90 FR 41096 (August 22, 2025)
- HUD, Fair Market Rents ... Fiscal Year 2026; Revised, 91 FR 21301 (April 21, 2026), effective May 21, 2026
- HUD User, FY2026 Fair Market Rent data file and documentation system
- 24 CFR 888.113 and 24 CFR 982.503
Fair Market Rents are program parameters, not guarantees. Actual assistance is determined by your local public housing agency.
