New HUD Fair Market Rents Take Effect, Changing Voucher Limits

New Fair Market Rents from the U.S. Department of Housing and Urban Development took effect on October 1, resetting the benchmarks that determine how much rent a Housing Choice Voucher, commonly called Section 8, can cover in each part of the country.

What changed

HUD published its fiscal year 2027 Fair Market Rents (FMRs) in the Federal Register on September 1. The national weighted-average change is about 2.0%, according to an analysis by accounting firm Novogradac. That is a smaller increase than in recent years and in line with the slowdown in rent growth seen across the private market.

FMRs are HUD's estimate of the 40th-percentile gross rent, including rent and basic utilities, paid by recent movers in an area. Local public housing agencies use them to set voucher payment standards, and they also feed into rent ceilings for other HUD programs, including the HOME and Emergency Solutions Grants programs and flat rents in public housing, according to the Mid-Atlantic Council for Affordable Housing.

How HUD calculated them

According to the HUD notice, the fiscal 2027 figures use Census Bureau American Community Survey data collected from 2020 to 2024, adjusted for rent growth through 2025 and trended forward. HUD blends private-sector rent data, from Apartment List, CoStar, Cotality, Moody's, RealPage and Zillow, with the government's CPI rent index to estimate recent inflation.

One notable change: the Bureau of Labor Statistics discontinued its local housing fuels and utilities price index, which HUD had used to estimate utility cost growth. For FY 2027, HUD now uses a weighted composite of state-level data on electricity, natural gas and other fuels, plus national data on water, sewer and trash costs.

HUD also limits how far FMRs can fall in one year. Under its rules, an area's FMRs cannot drop below 90% of the prior year's level. No area's two-bedroom FMR can fall below $1,014, the national non-metropolitan median rent HUD calculated for this year.

Why it matters now

The modest national increase reflects the cooler rental market of 2024 and 2025, when a surge of new apartments held down rent growth in many metros. Private trackers now show rents firming again, with Zillow reporting annual growth of 2.7% in September. If market rents rise faster than payment standards, voucher holders can find fewer units within their limit. A recent analysis by The Money Overview noted that a higher FMR does not by itself lower what tenants pay out of pocket, because landlords can still ask above the ceiling, a gap that can weigh most on renters with fixed incomes such as older adults.

What it means for voucher holders

• Your payment standard may change, but not always right away. Housing agencies set payment standards between 90% and 110% of FMR and may need time to adopt new levels. For current voucher holders, an increased payment standard typically applies at your next regular reexamination.
• Decreases are usually phased in. If your area's FMR fell, agency rules generally delay applying a lower payment standard to existing tenants, so ask your caseworker how and when it affects you.
• Search with the new number. If you are looking for a unit, ask your housing agency for the current payment standard by bedroom size. A higher limit can open up more neighborhoods.
• Watch the gap above the standard. If a landlord charges more than the payment standard, you generally pay the difference, and new voucher holders cannot pay more than 40% of adjusted income toward rent and utilities when they first lease a unit.
• Utility allowances matter too. With HUD's new utility methodology and higher energy costs, ask whether your agency is updating its utility allowance schedule.

Next steps

HUD's notice allowed public housing agencies and the public to comment and request reevaluations of specific area FMRs within 30 days of publication. Final figures for each county, metro area and, where required, ZIP code-level Small Area FMRs are available on HUD's huduser.gov data portal.