Small Area FMR PHAs May Apply for Additional Administrative Fees

HUD’s Office of Public and Indian Housing (PIH) recently sent letters to PHAs inviting them to request up to $25,000 in additional administrative fees to reimburse them for the costs associated with implementing Small Area Fair Market Rents (SAFMRs). As of April 1, 2018, PHAs in 24 metropolitan areas are required to use SAFMRs. Other PHAs may voluntarily use SAFMRs. PHAs have until Dec. 31 to apply for the additional administrative fees.

Small Area FMRs reflect rents for U.S. Postal ZIP codes, while traditional fair market rents (FMRs) reflect a single rent standard for an entire metropolitan region. The intent of SAFMRs is to provide voucher payment standards that are better aligned with neighborhood-scale rental markets, resulting in relatively higher subsidies in neighborhoods that have higher rents but greater opportunities, and relatively lower subsidies in neighborhoods that have lower rents and higher concentrations of voucher households.

The letter provides examples of activities that may be considered for administrative fee cost reimbursement:

• Conducting additional outreach to households and landlords regarding how SAFMRs affect the payment standard;
• Developing additional briefing materials for new housing markets;
• Hiring additional staff;
• Training staff;
• Making changes to a rent-reasonableness determination methodology; and
• Modifying software to accommodate SAFMRs.