HUD published the Fiscal Year 2027 Fair Market Rents (FMRs) on September 1, 2026. The new FMRs take effect on October 1, 2026, and they apply to the Housing Choice Voucher Program, the Moderate Rehabilitation Single Room Occupancy Program, and several other HUD programs your agency touches. If your agency wants to request a reevaluation of your area’s FMR, the window to act is short. Comments and initial reevaluation requests are due the same day the new FMRs take effect: October 1, 2026. 

What an FMR Actually Is, in Plain Terms 

An FMR is HUD’s estimate of what a decent, standard-quality rental unit costs in your area. Specifically, it targets the 40th percentile of local gross rents, meaning 40 percent of standard rentals in your market rent for that amount or less. 

That single number drives a lot downstream. For your HCV program, the FMR is the foundation your payment standards are built on. It also feeds into your HCV Renewal Funding Inflation Factor, which affects how much HAP funding HUD provides your agency for the year ahead.  

But a change in your area’s FMR does not automatically mean your agency must change its payment standards. The new FMR should trigger a review of your existing payment standard schedule. If your current payment standards remain within the allowable range, your agency may be able to leave them unchanged. If they fall outside that range, they will need to be realigned. 

What’s Changing This Year 

The most consequential change in FY 2027 is not the rent numbers themselves. It is how HUD calculated one piece of those numbers: utilities. 

For years, HUD leaned on a Bureau of Labor Statistics index that tracked local housing fuel and utility costs. That index stopped being published. HUD needed a replacement, and built one using a weighted mix of four cost categories: electricity, natural gas, fuel oil, and water, sewer, and trash service. Instead of one national index, this new model draws mainly on state-level data from the Energy Information Administration, combined with national BLS data where state data is not detailed enough. 

The utility-factor revision is primarily a technical response to the discontinuation of the BLS dataset HUD previously relied upon, rather than a broader overhaul of the FMR methodology. The need for a replacement had also been anticipated as HUD transitioned away from the discontinued data. 

Why does this matter to you. A utility calculation built on state-level energy data can move differently than a calculation built on a single national index, especially in states where energy costs have moved sharply in either direction. Your agency’s FMR could shift by more, or less, than you expect this year simply because of this methodology change, separate from any actual change in your local rental market. 

HUD also changed how it weights its overall inflation factor. Private-sector rent data now makes up about 55 percent of the final gross-rent inflation factor, with CPI rent data making up the remaining 45 percent. In practice, this means market-rate rent trends carry more weight in your FMR calculation this year than the government’s official consumer price data does. 

What Stayed the Same 

A few fundamentals did not change, and it is worth naming them so your team does not treat this as a full methodology overhaul. 

• Two-bedroom baseline. HUD still calculates its core FMR off two-bedroom rents, then adjusts up or down by bedroom size using its standard ratios. 
• The 10 percent floor. Your area’s FMR generally cannot drop more than 10 percent below last year’s number. This protection against a steep, sudden decrease remains in place. 
• Small Area FMR methodology. If your agency operates under Small Area FMRs, that calculation method is unchanged from FY 2026. 
• The five-year ACS data source. FY 2027 FMRs use 2020 to 2024 five-year American Community Survey data as the primary base-rent data, consistent with HUD’s established approach. 

A Data Point Worth Knowing 

For agencies operating in smaller or rural markets, HUD’s FY 2027 national nonmetropolitan two-bedroom minimum rent is $1,014. HUD also calculates a state-level nonmetropolitan median, and the applicable minimum for a particular area is the lower of the state or national nonmetropolitan median. An area’s two-bedroom FMR cannot fall below that applicable minimum.

Requesting a Reevaluation: How It Works 

If your agency believes the FY 2027 FMR for your area does not reflect actual local rental conditions, you can request a reevaluation. HUD requires this to be supported by more recent, verifiable local rent data, not just a general sense that rents feel higher than the published number. 

If your agency shares an FMR area with other PHAs, meaning you operate in a multi-jurisdictional FMR area, HUD requires that PHAs representing at least half of the voucher tenants in that area agree that a reevaluation is necessary before HUD will consider the request. If that describes your situation, this is a conversation to start now, not after your internal analysis is finished. Getting neighboring PHAs aligned takes time you do not want to lose against the October 1 deadline. 

Once a reevaluation request is filed, your agency has until January 8, 2027 to submit the supporting rent data behind it. HUD expects to publish revised FMRs coming out of approved reevaluations in April 2027. Areas with a valid, pending reevaluation request may continue using their FY 2026 FMR during the reevaluation period, or elect to move ahead with the FY 2027 FMR instead, whichever your agency determines fits its situation. 

Key Deadlines 

• September 1, 2026 — FY 2027 FMRs published. 
• October 1, 2026 — New FMRs take effect. 
• October 1, 2026 — Deadline to submit comments or an initial FMR reevaluation request. 
• January 1, 2027 — Deadline to adjust payment standards, if required by the new FMRs. 
• January 8, 2027 — Deadline to submit supporting rent data for a reevaluation already requested. 
• April 2027 — HUD’s expected publication date for revised FMRs resulting from approved reevaluations. 

What This Means for Your Agency 

1. Pull your area’s new FMR now. Confirm the FY 2027 number against what your payment standards currently assume, and identify any gap before October 1. 
2. Recalculate your budget exposure. Because the utility methodology changed, some areas will see bigger swings than a typical year. Run your HAP projections against the new number, not last year’s, and flag any material shift for your finance committee. 
3. Decide on a reevaluation request before October 1. If your local rent data suggests your area’s FMR understates actual market conditions, you have until October 1 to file. Waiting past that date closes this year’s window entirely. 
4. Line up your supporting data early if you plan to request reevaluation. You have until January 8, 2027 to submit it, but strong reevaluation requests take real preparation. Start pulling comparable local rent data now, rather than waiting until the request is already filed. 
5. Check your multi-jurisdictional agreement, if applicable. In multi-jurisdictional FMR areas, PHAs representing at least half of voucher tenants in the area must agree that reevaluation is necessary. If you share an FMR area with other PHAs, start that conversation before the deadline, not after. 
6. Realign payment standards by January 1, if necessary. The FY 2027 FMRs take effect October 1, 2026, but PHAs have three months to bring payment standards into alignment with the new FMRs where an adjustment is required. Use that window to evaluate your current schedule, determine whether changes are necessary, complete any required agency approvals, and make corresponding updates to your HCV Administrative Plan or payment standard schedule, as applicable. 
7. Communicate changes to your landlord network. If your payment standards shift meaningfully in either direction, give your participating landlords advance notice so it does not surface as a surprise during a rent negotiation. 

Common Questions From PHA Leadership 

Will our FMR definitely go up this year because of the methodology change? 

Not necessarily. The new utility model can move a local FMR up or down depending on how your state’s energy costs compare to the prior national index. Do not assume the direction without checking your area’s actual published number. 

Can our FMR drop sharply because of this change? 

The standard protection still applies. Your area’s FMR generally cannot fall more than 10 percent below last year’s figure, regardless of what the new utility methodology produces. 

Do we need to request a reevaluation if our FMR looks reasonable? 

No. Reevaluation is an optional process for agencies that believe the published FMR does not reflect real local conditions and that have data to support that claim. If your number looks accurate, no action is required beyond updating your payment standards for October 1. 

What if we operate under Small Area FMRs instead of standard metro-wide FMRs? 

The calculation methodology for Small Area FMRs is unchanged from FY 2026, so agencies using SAFMRs are not affected by the utility methodology change described in this notice. 

Resources to Support Your Team 

Much like the Fair Market Rent guidance above, AMA offers insight and instruction on a range of compliance topics your team faces throughout the year.

When Additional Support May Make Sense 

The utility methodology change means some agencies will see FMR movement that does not match their normal year-over-year pattern. If your team needs help recalculating payment standard exposure, building a reevaluation request, or coordinating a shared FMR area with neighboring PHAs, AMA’s compliance team can help you get it right before the October 1 deadline. 

This article is intended as general information and does not replace HUD regulations or official guidance.