HUD Releases Final FY 2017 FMRs
The U.S. Department of Housing and Urban Development (HUD) issued final fair market rents (FMRs) for HUD fiscal year (FY) 2017, which will be effective Oct. 1. FMRs in FY 2017 increased for the majority of the country. FY 2017 FMRs are higher than FY 2016 FMRs for approximately 77 percent of counties and lower for approximately 23 percent of counties. The average change in FMR is an increase of approximately 3 percent.
HUD is required to publish the FMRs at least annually to be effective Oct. 1 of each year. In general, the FMR for an area is an amount that would be needed to pay the rent and utilities of a privately owned, decent and safe rental housing unit of a modest nature with suitable amenities. FMRs are used to determine payment standards for the Housing Choice Voucher program, initial renewal rents for some expiring project-based Section 8 contracts, initial rent for housing assistance payment contracts in the Moderate Rehabilitation Single Room Occupancy program and rent ceilings in the HOME rental assistance program. In addition, the FMRs influence income and rent limits for the Low-Income Housing Tax Credit (LIHTC) program, tax-exempt bond (TEB) programs and other affordable housing programs.
FMRs are calculated as follows:
- Adjusted standard quality gross rents are set based on the 2010-2014 five-year American Community Survey (ACS) estimates of two-bedroom adjusted standard quality gross rents.
- HUD calculates a recent mover adjustment factor and applies this to the five-year base rent estimate
- The 2014 adjusted standard quality gross rents calculated above are adjusted to 2016 using the relevant (regional or local) change in gross rent Consumer Price Index (CPI) from annual 2014 to annual 2016.
- All estimates are then inflated from 2016 to FY 2017 using a national trend factor based on the forecast of gross rent changes through FY2017.
For LIHTC and TEB properties, the changes are of most direct relevance to income limits for properties located in high-cost housing areas where HUD uses the FMRs to calculate income, which subsequently affects LIHTC and TEB and rent limits. FMRs increased in 22 of the 34 of the areas that were considered high-cost housing in 2016 and decreased in 12 areas that were considered high-cost housing.
High-cost housing areas with increases in FMRs will likely see increases in the HUD-published multifamily tax subsidy project (MTSP) income limits; those with decreases in FMRs will likely see decreases in the HUD published MTSP income limits. For existing LIHTC and TEB properties, income limits will not decrease because of the hold harmless policy under Internal Revenue Code Section 142. However, new LIHTC and TEB units may have lower rent and income limits.
The table estimates what the 2017 50 percent MTSP will be based on the 2017 FMR. There are factors that could cause the income limit to be higher than what is shown (for example the area could now be subject to a different HUD adjustment), however, the limits should be no lower than what is shown in the table on the following page.
Estimated 2017 50 Percent MTSP Income Limits
|% Change in FMR From 2016 to 2017||$ Change in FMR From 2016 to 2017||2017 50% 4-Person MTSP Based on FMR With 5% Cap/Floor||2016 4 Person 50% MTSP||% Change in MTSP Based on FMR|
|Nome Census Area, AK||14.97%||206||42,100||40,100||4.99%|
|Navajo County, AZ||-1.97%||-15||21,800||22,250||-2.02%|
|Yuma, AZ MSA||5.84%||48||25,100||23,950||4.80%|
|Los Angeles-Long Beach-Glendale, CA HUD Metro FMR Area||3.69%||55||45,050||43,400||3.80%|
|Napa, CA MSA||6.53%||98||45,850||43,700||4.92%|
|Santa Ana-Anaheim-Irvine, CA HUD Metro FMR Area||8.43%||141||51,150||48,750||4.92%|
|Riverside-San Bernardino-Ontario, CA MSA||0.84%||10||33,500||31,950||4.85%|
|Santa Rosa, CA MSA||11.17%||158||43,250||41,200||4.98%|
|Oxnard-Thousand Oaks-Ventura, CA MSA||9.99%||160||49,000||46,700||4.93%|
|Pitkin County, CO||-3.79%||-63||46,600||48,450||-3.82%|
|San Juan County, CO||-2.14%||-23||30,700||31,400||-2.23%|
|San Miguel County, CO||-5.65%||-78||38,200||40,200||-4.98%|
|Palm Coast, FL HUD Metro FMR Area||10.90%||101||28,350||27,000||5.00%|
|Orlando-Kissimmee-Sanford, FL MSA||-0.10%||-1||29,200||29,250||-0.17%|
|Monroe County, FL||14.19%||209||45,050||42,950||4.89%|
|West Palm Beach-Boca Raton, FL HUD Metro FMR Area||10.48%||130||35,250||33,600||4.91%|
|Lakeland-Winter Haven, FL MSA||-6.99%||-63||24,950||26,250||-4.95%|
|Deltona-Daytona Beach-Ormond Beach, FL HUD Metro FMR Area||7.03%||63||27,400||26,100||4.98%|
|Hinesville, GA HUD Metro FMR Area||7.00%||59||25,750||24,550||4.89%|
|Taliaferro County, GA||-6.72%||-55||22,700||23,850||-4.82%|
|Hawaii County, HI||6.45%||77||36,500||34,800||4.89%|
|Barnstable Town, MA MSA||-14.89%||-217||40,350||42,450||-4.95%|
|Atlantic City-Hammonton, NJ MSA||13.72%||158||35,200||33,550||4.92%|
|Vineland-Bridgeton, NJ MSA||0.09%||1||32,950||32,900||0.15%|
|Watertown-Fort Drum, NY MSA||0.74%||8||31,900||31,700||0.63%|
|Concho County, TX||6.87%||74||32,950||31,400||4.94%|
|Corpus Christi, TX HUD Metro FMR Area||-0.50%||-5||28,900||29,050||-0.52%|
|Arecibo, PR HUD Metro FMR Area||-10.74%||-52||13,400||14,100||-4.96%|
|Caguas, PR HUD Metro FMR Area||-13.35%||-71||14,750||15,500||-4.84%|
|Yauco, PR HUD Metro FMR Area||5.37%||22||12,500||11,950||4.60%|
|Mayagüez, PR MSA||23.79%||108||13,900||13,250||4.91%|
|Ponce, PR HUD Metro FMR Area||-6.94%||-34||13,600||14,300||-4.90%|
|Utuado Municipio, PR HUD Metro FMR Area||2.37%||10||12,600||12,300||2.44%|
|St. Thomas Island, VI||2.73%||28||30,700||29,900||2.68%|
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