HUD's Small Area Fair Market Rents (SAFMRs) are the most widely trusted free rent benchmark in the US real estate industry. Published annually and covering 28,000+ ZIP codes, they're the foundation of ZipMarketData's rental yield calculations.
What SAFMRs Represent
SAFMR represents the 40th percentile of gross rents paid by recent movers in a ZIP code. "Recent mover" means households who moved within the past 15 months — this ensures the benchmark reflects current market rates, not stale long-term tenancies. "Gross rent" includes utilities, so compare against market rents that bundle utilities for an apples-to-apples view.
Studio Through 4-Bedroom Coverage
Each ZIP code has separate FMR values for 5 bedroom categories: BR0 (efficiency/studio), BR1 (1-bedroom), BR2 (2-bedroom), BR3 (3-bedroom), and BR4 (4-bedroom). This lets investors underwrite properties at the specific bedroom count they're targeting.
Using FMR in Rental Yield Models
Conservative underwriting uses FMR as the base rent assumption, then adds a 5–15% premium in high-demand markets or subtracts 5–10% in soft markets. A simple sensitivity analysis:
| Scenario | Monthly Rent | Gross Yield (on $300K) |
|---|---|---|
| FMR − 10% (conservative) | $1,260 | 5.0% |
| FMR base | $1,400 | 5.6% |
| FMR + 10% (optimistic) | $1,540 | 6.2% |