HUD Housing Glossary
Plain-English definitions of the federal housing terms used throughout RentLimits.com. Click any term to link to it directly.
- Fair Market Rent (FMR)
- HUD's annual estimate of the dollar amount it costs to rent modest housing in a given area. FMRs are set at the 40th percentile of gross rents paid by recent movers — meaning roughly 40% of recent renters pay at or below this amount. FMRs are published each fall for the coming federal fiscal year (October–September) and form the basis of Section 8 voucher payment standards as well as caps for HOME-funded and LIHTC rents.
- Small Area FMR (SAFMR)
- A ZIP-code-level Fair Market Rent published by HUD for designated metropolitan areas. Instead of one metro-wide FMR, each ZIP gets its own. SAFMRs were designed to give voucher holders greater purchasing power in higher-opportunity neighborhoods. As of FY2026, HUD publishes SAFMRs for 77 metro areas covering more than 9,000 ZIP codes.
- Area Median Income (AMI)
- The midpoint household income for an area, estimated and published annually by HUD. AMI is the foundation of housing-program income eligibility and is always referenced as a percentage band (30%, 50%, 60%, 80%) for a specific household size. HUD adjusts the raw median for household size, with smaller households having lower limits.
- Section 8 Housing Choice Voucher (HCV)
- A federal rental subsidy administered by local PHAs. The voucher pays the difference between the household's share (generally 30% of adjusted income) and the rent, up to the local payment standard. Vouchers are portable and tenant-based — the household can move with the voucher across PHA jurisdictions, subject to portability rules.
- Payment Standard
- The maximum subsidy a PHA will provide on behalf of a voucher holder. By regulation, PHAs set payment standards between 90% and 110% of the local FMR (or SAFMR by ZIP for SAFMR metros). A higher payment standard expands the universe of affordable units; a lower one stretches a fixed voucher budget further.
- HUD Metro FMR Area (HMFA)
- A HUD-defined sub-area inside a larger metropolitan statistical area, created when one portion of a metro has rents materially different from the metro as a whole. HMFAs get their own FMR (and often their own AMI) rather than sharing the metro-wide number. Examples include carving wealthier suburban counties out of an MSA.
- LIHTC — Low-Income Housing Tax Credit
- The federal program that finances most new affordable rental housing in the United States. Developers receive a tax credit in exchange for capping rents on a fixed share of units. LIHTC maximum gross rent = 30% of the applicable AMI band (50% or 60%) ÷ 12 months, with HUD's assumed household size of 1.5 persons per bedroom. Gross rent includes any tenant-paid utility allowance.
- HOME — HOME Investment Partnerships Program
- A HUD block grant program that funds affordable rental housing. HOME-funded units have rent caps split into two tiers: High HOME rents (the lesser of the FMR or 30% of 65% AMI, applied to most assisted units) and Low HOME rents (30% of 50% AMI, reserved for very low-income set-aside units under the "20 at 50" requirement for projects with five or more HOME units).
- AMI Bands (30%, 50%, 60%, 80%)
- Standard percentage tiers of Area Median Income used to set eligibility for federal housing programs:
• 30% AMI — Extremely Low Income (ELI): Strongest assistance priority; at least 75% of new Section 8 vouchers must go to this group.
• 50% AMI — Very Low Income (VLI): The standard Section 8 voucher eligibility ceiling.
• 60% AMI: Used as the upper LIHTC rent calculation band.
• 80% AMI — Low Income (LI): Used by HOME and many local affordable housing programs. - Public Housing Authority (PHA)
- A local government agency that administers federal housing assistance for a defined jurisdiction. PHAs operate public housing units, run Section 8 voucher programs, maintain waitlists, set payment standards within HUD's 90–110% range, and inspect units for housing-quality standards. There are roughly 3,800 PHAs nationwide.