The Spring Street Brief

HUD has published a Federal Register notice detailing the methodology for calculating FY 2027 Fair Market Rents (FMRs), which set payment ceilings for Housing Choice Vouchers and other federal rental assistance programs. Key changes include revisions to how HUD calculates the utility portion of gross rent inflation factors and updates to trend factor forecasts — both of which affect how closely final FMR figures track real market conditions. The notice also outlines the HOTMA-required procedures for PHAs to request FMR reevaluations.

Show Notes

HUD has published a Federal Register notice detailing the methodology for calculating FY 2027 Fair Market Rents (FMRs), which set payment ceilings for Housing Choice Vouchers and other federal rental assistance programs. Key changes include revisions to how HUD calculates the utility portion of gross rent inflation factors and updates to trend factor forecasts — both of which affect how closely final FMR figures track real market conditions. The notice also outlines the HOTMA-required procedures for PHAs to request FMR reevaluations. For LIHTC investors, developers, and lenders with voucher-assisted or FMR-constrained deals, the timeline is unusually compressed.

Key Takeaways:

  • HUD's FY 2027 FMR methodology notice is now published in the Federal Register and open for public comment.
  • HUD is changing how it calculates the utility portion of gross rent inflation factors — a technical shift with real impact on final FMR levels.
  • Trend factor forecasts are also being updated, affecting how FMRs are projected forward from ACS reference data.
  • New FMRs take effect October 1, 2026 — the same day the public comment period closes.
  • PHAs can request FMR reevaluations under HOTMA; procedures for doing so are detailed in this notice.
  • Deals in FMR-constrained markets — particularly those dependent on competitive payment standards — face the most direct exposure to methodology changes.
  • The comment window is effectively closed by the time final figures are published; stakeholders must act before October 1.

With the comment deadline and effective date landing on the same day, developers, syndicators, and PHAs have a narrow window to influence the methodology before it locks in for the full fiscal year. Stakeholders with voucher-assisted portfolios or deals in tight FMR markets should review the utility inflation factor and trend forecast changes now and determine whether formal comments or a PHA reevaluation request are warranted.

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