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Presentation, Discussion, and Possible Action on the 2026 Section 8 Payment Standards
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RECOMMENDED ACTION
recommendation
WHEREAS, the Department is designated as a Public Housing Authority (PHA) and administers both tenant-based and project-based vouchers under the Section 8 Program; and
WHEREAS, 24 CFR §982.503 requires PHAs to establish payment standards annually for areas served by its tenant-based vouchers, including its Housing Choice Vouchers (HCVs), Non-Elderly Disabled Vouchers (NED), Mainstream Vouchers, Veterans Affairs Supportive Housing (VASH) Tenant-Based Vouchers, and Foster Youth to Independence (FYI) Vouchers;
NOW, therefore, it is hereby,
RESOLVED, that the 2026 tenant-based voucher payment standards for the Department in its role as a PHA, and in accordance with 24 CFR §982.505, are hereby approved in the form presented to this meeting.
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BACKGROUND
The U.S. Department of Housing and Urban Development (HUD) requires PHAs to adopt a payment standard schedule annually that establishes voucher payment standard amounts for each FMR area in the PHA jurisdiction. The PHA must establish payment standard amounts for each unit size, defined as the number of bedrooms in each housing unit. HUD publishes Small Area Fair Market Rents (SAFMRs) and FMRs for zero-to-four-bedroom units; the payment standard for unit sizes larger than four bedrooms are calculated by adding 15% of the four-bedroom payment standard for each extra bedroom.
The Department, operating as a PHA, may establish the payment standard amount at any level between 90% and 110% of the published SAFMR or FMR without prior authorization from HUD for most voucher types, but this can go up to 120% for VASH and EHV. The establishment of the standard is important because the standard should ensure that tenants are able to rent high-quality units while minimizing the tenant rent burden, but should also allow the PHA to utilize as many vouchers as possible within its funding allocation. An exception to the payment standard may be granted as a reasonable accommodation for a person with a disability.
Small-Area Fair Market Rents (SAFMRs) were created by HUD in response to increasing demand for more localized measures of rents. HUD requires that PHAs managing programs in the Dallas, TX HUD, San Antonio-New Braunfels, and Fort Worth-Arlington Metropolitan Fair Market Rent Areas (FMR Areas), including areas where the Department has jurisdiction, to utilize its published SAFMRs instead of FMRs. HUD has now published SAFMRs for most zip codes in Texas. In the event that a zip code is utilized in more than one county, the SAFMR in all counties included in the zip code area is the SAFMR published for one individual county. The use of the SAFMR is mandatory only in certain areas; however, the SAFMR is designed by HUD to provide tenants with access to a broader range of neighborhoods, thus allowing them the choice to move into areas with more employment, transportation and educational opportunities. To maximize use of the SAFMR, while also acknowledging that its use may not be appropriate in instances where a TDHCA assisted tenant selects a unit in another PHA’s regular jurisdiction, staff proposes the following method to determine the payment standard for TDHCA assisted tenants:
• Housing Choice Vouchers (HCV), inclusive of Emergency Housing Vouchers (EHV)
• Non-Elderly Disabled (NED) Vouchers
• Mainstream (Mainstream) Vouchers
• Veterans Affairs Supportive Housing (VASH) Tenant-Based Vouchers
o In areas not included in another PHA’s regular jurisdiction, the payment standard will be 100% of the SAFMR in all zip codes where an SAFMR is published by HUD.
o In areas not included in another PHA’s regular jurisdiction where no SAFMR is published by HUD, the payment standard will be 100% of the FMR.
o In areas included in another PHA’s regular jurisdiction, if the PHA’s payment standard does not require a waiver from HUD to implement, the payment standard will be the standard utilized by the applicable PHA.
o In areas included in another PHA’s regular jurisdiction, if the PHA’s payment standard does require a waiver from HUD to implement, the payment standard will be the payment standard within its authority that is closest to the payment standard used by the applicable PHA.
This payment standard methodology deviates from the methodology utilized last year for EHV tenants. As the EHV Program is not anticipated to be funded past 2026, staff recommends that the payment standard for EHV be aligned with the Department’s payment standards for its regular HCV Program. In 2025, the Department adopted a payment standard that was 120% of the SAFMR or FMR, as applicable. However, alignment of the payment standards will encourage EHV participants to apply for placement on the HCV waiting list, as it removes the incentive of a higher payment standard if the EHV is retained when an HCV may be made available.
• Foster Youth to Independence (FYI) Vouchers
o In areas not included in another PHA’s regular jurisdiction, the payment standard will be the higher of 110% of the SAFMR in all zip codes where an SAFMR is published by HUD, or 110% of the FMR.
This increased payment standard for this specific voucher type is designed to expand housing choice for youth transitioning out of foster care, enabling them to access neighborhoods with stronger employment, transportation, and educational opportunities, while also ensuing flexibility for the market conditions.
APPLICABILITY
These new payment standards will become effective on January 1, 2026, and will be applied at the first annual reexamination following the effective date of the increase in the payment standard, unless the payment standard decreased, in which case the new payment standard will not be applied for the first year the decreased payment standard is in effect. This will also affect the tenant upon a subsequent change to the HAP contract, such as relocating to a new unit or a change in the family's household composition. Tenants and property owners will be given notice of the updated payment standards approximately 30 days prior to the change, and the payment standards will be made available through TDHCA’s website.