HUD Proposes Changes to FMR Methodology

Last week, HUD’s Office of Policy Development and Research (PD&R) published proposed changes to the methodology used for calculating fair market rents. There are two material changes included to the calculation of FMRs. First, the proposal would include a change in the definition of “recent mover” as used in the recent movement adjustment. HUD is proposing to consider the rents of households who moved into their unit only in the current American Community Survey (ACS) year. Currently, HUD looks at movers in the past 23 months. HUD intends for this change to be more reflective of current market conditions.

The second change would be to retain and expand the use of rent inflation factors calculated by private sector sources. HUD first used this expanded inflation factor while calculating 2023 FMRs. NAHRO encourages HUD to continue using the most robust and up-to-date inflation factors to ensure FMRs are matching the current market.

The notice can be found here. Comments are due July 24.