In the Housing Choice Voucher (HCV) program, payment standards are used in the calculation of the housing assistance payment (HAP) that the Public Housing Agency (PHA) pays to the owner on behalf of the family leasing the unit. 24 C.F.R. 982.4 defines Payment Standard as the maximum monthly assistance payment for a family assisted in the voucher program (before deducting the total tenant payment by the family). If the unit is located in an exception area, the PHA must use the appropriate payment standard for that exception area.

The level at which the payment standard is set directly affects the amount of subsidy a family will receive, and, therefore, the amount of rent paid by program participants. If the family leases a unit with a gross rent at or below the payment standard for the family, the family’s share of the rent plus an allowance for utilities will be equal to the family’s total tenant payment (TTP) (see the Income Determination chapter). If the gross rent for the unit is higher than the payment standard, the family is responsible for the difference. In this case, the total family share will be higher than the family's TTP.

HUD establishes small area FMRs (SAFMRs) at the Zip Code level. SAFMRs are intended to result in payment standards that align more closely with local rental costs, particularly in higher-cost areas. HUD adopted SAFMRs via a Final Rule published on November 16, 2016, for the express purpose of providing HCV-assisted families with access to "areas of high opportunity and lower poverty."

For more information on paymnet standard, please see: https://www.hud.gov/sites/dfiles/PIH/documents/HCV_Guidebook_Payment_Standards.pdf