HUD HCV Guidebook § 3.5.2
Simplified Process for Exception Payment Standards Greater than 110 percent up to 120 percent (HUD HCV Guidebook)
Operative Text
of the Applicable FMR....................................................................................................................................... 14
3.5.3 Exception Payment Standards That Require HUD Approval ................................................................ 16
3.5.4 Impact of HUD-Approved Exception Payment Standards on PBV Rent Determination ...................... 17
3.6 Establishing the Payment Standard Schedule ............................................................................................. 18
3.7 Payment Standards for Special Purpose Voucher Programs ...................................................................... 18
4 Revising the Payment Standards ..................................................................................................................... 19
4.1 Annual Review of Payment Standards .......................................................................................................... 20
4.2 Lowering the Payment Standard ................................................................................................................... 21
4.3 File Documentation ........................................................................................................................................ 21
4.4 Applying the Payment Standard .................................................................................................................... 21
5 Changes in Payment Standard Amounts......................................................................................................... 22
5.1 When the Payment Standard Increases ....................................................................................................... 22
5.2 When the Payment Standard Decreases...................................................................................................... 22
5.3 Change in Family Unit (Voucher) Size During the HAP Contract Term ........................................................ 25
6 Exception Payment Standard as a Reasonable Accommodation .................................................................. 25
6.1 Reasonable Accommodation Exception Payment Standard Requiring HUD Approval .............................. 25
6.2 Reasonable Accommodation Exception Payment Standard Calculation for Shared Housing .................. 27
7 Reevaluation of HUD-published FMRs/SAFMRs ............................................................................................. 27
8 Administrative Plan Requirements .................................................................................................................. 28
9 Glossary ............................................................................................................................................................. 29
Changes from Previous Version
Page Description of Change Date Change
Made
5 Added applicable FMRs to Section 2 June 2025
7 Added new Section 2.2 on payment standard groupings June 2025
8 Added Section 2.3 on SAFMRs and Project Based Vouchers (PBV) June 2025
10 Added Section 2.7 on inapplicability of SAFMRs to other HUD programs June 2025
10 Added Section 2.8 on suspension of SAFMRs or temporary exemption June 2025
12 Added guidance on phase-out of success rate payment standards to Section 3.3 June 2025
12 Updated Section 3.4 on payment standards below the basic range to align with June 2025
24 CFR 982.503(e) and include information PHAs are encouraged to provide to
HUD in its request
13 Updated Section 3.5 on exception payment standards to incorporate regulatory June 2025
changes in 24 CFR 982.503(d) which resulted from the publication of 89 FR
38224 (May 7 ,2024)
18 Updated Section 3.7 on establishing payment standard to include flexibilities June 2025
related to HUD-VASH and EHV
22 Updated Sections 5.1 and 5.2 with guidance on payment standard increases and June 2025
decreases during the HAP contract term to incorporate changes to 24 CFR
982.505(c)(3) which resulted from 89 FR 38224 (May 7, 2024)
25 Added Section 5.3 on change in family voucher size during a HAP contract term June 2025
to provide guidance in accordance with 24 CFR 982.505(c)(6)
25 Reorganized and updated Section 6 to include reference to Notice PIH 2025-12 June 2025
and added guidance on applicable FMR for reasonable accommodation
exception payment standards (RA EPS), HUD-VASH RA EPS, and calculations for
shared housing
27 Added Section 7 to include information on reevaluation of HUD-published June 2025
FMRs/SAFMRs
28 Added Section 8 to include a summary of administrative plan requirements June 2025
regarding payment standards
29 Added the term “applicable FMR” to the glossary June 2025HUD Housing Choice Voucher Guidebook § 3.5.2 addresses a simplified administrative process that Public Housing Authorities (PHAs) may use to set exception payment standards above the standard 110 percent ceiling, up to 120 percent of the applicable Fair Market Rent (FMR), without requiring full HUD approval. This provision is part of a broader framework governing how housing assistance payment amounts are calculated and adjusted for the voucher program. The text provided appears to be a table of contents and change-log section of the guidebook, documenting updates made in June 2025 that incorporated regulatory changes stemming from 89 FR 38224 (May 7, 2024).
Plain English — not legal advice.
Property owners participating in the Housing Choice Voucher program should be aware that § 3.5.2 of the HUD guidebook outlines a streamlined path for PHAs to establish exception payment standards between 110 and 120 percent of the applicable FMR without seeking direct HUD approval. Compliant operators generally stay informed about the payment standard schedules their local PHA has adopted, as these directly affect the maximum subsidy amounts applied to HAP contracts. Landlords working in areas where a PHA has adopted exception payment standards under § 3.5.2 may find that higher payment ceilings affect rent negotiation and unit eligibility determinations.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
For voucher holders, § 3.5.2 of the HUD Housing Choice Voucher Guidebook is relevant because it governs whether your local PHA can set a higher payment standard — up to 120 percent of the applicable FMR — through a simplified process, which can affect how much of your rent the subsidy covers. Tenants who believe their PHA's payment standard is limiting their ability to find suitable housing may have the option of raising this concern with their local PHA or contacting a tenant-rights organization familiar with the voucher program. The U.S. Department of Housing and Urban Development oversees PHA compliance with payment standard rules, and tenants can also reach out to their local HUD field office for general information about how § 3.5.2 applies in their area.
General guidance for tenants — not legal advice for your specific situation. Consult a tenant-rights organization or attorney for advice on your case.
Generated September 26, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.
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