New Small Area FMR Guidance
On November 15, HUD released a notice titled “Small Area Fair Market Rent Implementation Guidance for FY2024 Designated Metropolitan Areas” (Notice PIH 2023-32). The guidance provides certain implementation details for the recent expansion of the mandatory use of Small Area FMRs. The Department has designated 41 new metropolitan areas where PHAs will be required to use Small Area FMRs for the Housing Choice Voucher program. Small Area FMRs will be required in those areas on October 1, 2024, but payment standards based on those small area FMRs will not be required to be updated until January 1, 2025. Housing agencies in those areas may choose to use the small area FMRs for their project-based vouchers.
The notice also provides additional information on the implementation of small area FMRs. First, small area FMR designations are permanent. Second, those PHAs that must mandatorily implement small area FMRs in the new areas will receive $10,000 to cover the administrative costs of transitioning to small area FMRs. These funds will be disbursed automatically, and no PHA will have to apply for them. Third, those PHAs, in the mandatorily designated areas, that wish to begin using small area FMRs immediately may do so under the current “opt-in” procedures. Finally, moving to work (MTW) agencies, in mandatorily designated areas, are required to use small area FMRs, unless they have an alternative payment standards policy in their HUD-approved annual MTW plans.
The full notice can be read here.