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HUD Releases List of New Metropolitan Areas Required to Use SAFMRs

Forty-One Additional MSAs Must Use SAFMRs in 2025

HUD has scheduled publication in the Federal Register of a notice listing 41 additional Metropolitan Statistical Areas (MSAs) that will be required to utilize Small Area Fair Market Rents (SAFMRs). The implementation date is October 1, 2024, with full adoption and use no later than January 1, 2025. 

In the November 2016 final rule establishing the zip-code-based SAFMR as an alternative to the MSA-based FMR, areas meeting certain criteria were required to begin using the SAFMR, while other areas had the option. Five criteria were established to determine areas required to use SAFMR. These criteria are:

  1. At least 2,500 vouchers are under lease in the FMR area;
  2. 20% of the rental stock are in SAFMR areas with standards that are more than 110% of the FMR;
  3. 25% or more of voucher households are leased in concentrated low-income areas;
  4. The percentage of voucher households living in low-income areas relative to all renters exceeds 155% (or 1.55); and,
  5. The vacancy rate for the metropolitan area is higher than 4%. 

The final rule also required HUD to make new area designations every five years. As the original SAFMR implementation began in 2018, HUD is meeting this obligation by publishing this notice. 

HUD has retained the evaluation criteria of the original notice and has determined that 41 additional areas, containing 263 HAs, now meet the criteria and thus will be required to utilize SAFMRs. As the requirement, once established, is permanent, areas identified in the original notice remain required to utilize the SAFMRs. HUD has indicated that once implemented, over 40 percent of the program will now operate under SAFMRs. The full list of all 65 areas required to utilize FMRs is available here.


Time, Resources, Assistance to Be Available

Based on feedback from original implementers, researchers, and advocacy groups, HUD is providing more than a year for agencies to prepare and implement the requirement.  This is in acknowledgment of the need to change IT systems, train staff, revise materials, and educate tenants and landlords.   

HUD is planning a webinar for impacted areas on November 7, hopes to link new areas with mentors who have previously implemented SAFMRs, is preparing new materials for implementing agencies, and has plans for on-demand technical assistance to be available next year. Existing information on SAFMR implementation, with links to existing training and resources, can be found here. HUD has also made a Frequently Asked Questions document on SAFMRs available. 

HUD Notice PIH 2018-01 continues to be the primary notice, with updated notices expected soon, and full revision to this notice in early 2024 after implementation of HOTMA changes. 

While results of SAFMRs have been more modest than in the pilot sites, HUD data indicates that areas utilizing SAFMRs have seen a reduced concentration of voucher households in low-income areas and increased use of vouchers in higher-income areas. They also have not seen significant overall Per Unit Cost (PUC) impacts nor overall increased costs attributable to the SAFMR implementation. 

Agencies wishing to implement SAFMRs prior to January 1, 2025, must utilize the opt-in protocol of Notice PIH 2018-01. 

PHADA will provide additional analysis in an upcoming Advocate, and will continue to monitor HUD actions and inform members as new information and resources become available.

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