HUD HCV Guidebook § 3

PHAs are required to establish payment standards for each unit size in an FMR/SAFMR area.31 Unit size is
measured by the number of bedrooms in a unit. For each unit size, the PHA may establish a single payment
standard for the whole FMR area or establish a separate payment standard amount for each designated part
of the FMR area. For a PHA that employs SAFMRs, each ZIP Code will be considered a “designated part” of
the FMR area. These payment standard amounts comprise the PHA's payment standard schedule.
The payment standards may be within several ranges depending on facts about the rental market. Payment
standards may be established:
          •   Within the “basic range,” which is between 90 percent to 110 percent of the published applicable
              FMR.
          •   As exception payment standards above 110 percent of the published FMR. See Section 3.5 of this
              chapter for guidance as there are varying requirements (either HUD notification or HUD approval)
              depending on the exception payment standard amount requested, the PHA’s success rate, and the
              rent burden of families in the PHA’s HCV program.
          •   Payment standards below 90 percent of the published applicable FMR. See Section 3.4 of this
              chapter for guidance as this requires HUD approval.
In areas transitioning from FMRs to SAFMRs, HUD will compare the preliminary SAFMRs with the final FMRs
from the prior year and establish the final SAFMRs at a level that is not less than 90 percent of the prior-year
FMRs.32