What is Fair Market Rent?
Fair Market Rent is the 40th percentile of gross rent prices (rent plus utilities) for an acquitted rental property with a certain number of bedrooms in a given region.
Fair Market Rent is determined each year by the HUD and is used as a guide for providing federal rental assistance.
For example: The 2017 Fair Market Rent for a one-bedroom home in Rochester, NY is $737 per month. A two-bedroom in Rochester is $915 per month. Fair Market Rent for a studio or efficiency in Washington, DC is $1,440 per month.
Each FMR area has established rates for studios through four-bedroom homes.
What is Section 8?
Section 8 is the common name for the Housing Choice Voucher Program, a rental assistance program Department of Housing and Urban Development. ("Section 8" refers to the law establishing the program.)
Section 8 allows private and commercial property owners to rent their property for the established Fair Market Rent price to qualified lower-income tenants. Landlords receive payment through a combination of government vouchers and tenant contribution. (Tenant contribution is not to exceed 30% of total family income).
40th Percentile, 50th Percentile, and the Median
The Fair Market Rent is the 40th-percentile price of rents in an area. Percentiles are closely related to the concept of the median. Median is a measure of central tendency, like average, but median controls for outliers. The 50th-percentile is the median. The HUD chooses the 40th-percentile (slightly below the median price) as the Fair Market Rent.
Note: Some FMR areas have been designated by the HUD as 50th-percentile regions. (50th-percentile regions noted though-out this site).
In order to find the 40th-percentile the HUD also needs to determine the 50th-percentile. Some landlords may be interested in finding the 50th-percentile (median) rent in there area even though it is not Fair Market Rent. The tools listed below show both the Fair Market Rent and the median rent.
Find the Fair Market Rent of your Unit
RentData.org provides three ways to find the Fair Market Rent of your unit.
- Find your region by state,
- Lookup your region by ZIP code, or
- Search your region using the search bar at the top of the page and hitting "Go."
Once you determine the Fair Market Rent of your home or apartment, you may be interested in renting your property to Section 8 tenants.