Thursday, December 10, 2015

HUD 2016 Final FMR's are Out: Not Effective October 1, and Changes from Proposed FMR's

HUD has published final FY 2016 in the [advance] Public Inspection Federal Register HERE

Final FMR's are now or will soon be available from HUD web page HERE

My prior post about proposed FMR's is HERE

HUD made a change to the trend factor it used resulting in increases in previously published proposed FMR's.  

HUD is also making the FMR's effective upon the publication date in the Federal Register [anticipate that will be December 10th] and NOT retroactive to October 1st.

PHA's Can Now Change Payment Standards
Individual PHA's can use the new FMR's to update payment standards.

Home Forward in Multnomah County has indicated it plans to do so in January to deal with the rapidly increasing rents in the Portland metro area. Home Forward has also indicated that they intend to ask for HUD approval in their MTW Plan to increase payment standards up to 160% of FMR in select zip codes and bedroom sizes. That could mean up to $1,387 for a 1 BR [FMR of $857 or $1,642 for a 2 BR [FMR of $1,026unit. (All voucher units would remain subject to an individual rent reasonableness review). 

NOTE: The FY 2015 to 2016 2 BR FMR increase for Portland metro is 8.7%, $82)

Renter Affordability Math Tip: To determine how much additional income is necessary to afford a monthly rent increase, multiply the monthly rent increase by 40 to calculate the increase in annual income required to keep the rent affordable (assuming 30% of income should be available for rent)

So for the Portland metro the $82 jump in 2 bedroom FMR's for 2016 means a household would need to earn an extra $3,280 annually to keep the rent increase affordable. 

Similarly, to determine the annual income required to keep the FMR affordable you can multiply the total monthly FMR by 40. So for the 2 BR Portland FMR of $1,026 a household would need to have an annual income of at least $41,040 to keep the rent affordable.   

Originally created and posted on the Oregon Housing Blog

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