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EXHIBIT 1 The PHA must establish a payment standard schedule that establishes payment standard amounts for each FMR area within the PHA's jurisdiction and for each unit size within each of the FMR areas. In many cases a single FMR area will cover the PHA's entire jurisdiction. Some PHAs' jurisdictions include more than one FMR area. The PHA's established payment standards within the payment standard area always must be within the basic range of the applicable FMR area, or any HUD -approved exception payment standard. Program regulations and this policy refer to the "applicable FMR." The "applicable FMR" is the HUD -published SAFMR for PHAs in mandatory SAFMR areas or for those PHAs that have opted -in to using the SAFMR, both of which are discussed below. Small Area FMR PHAs (Mandatory and Opt -In) [Notice PIH 2O18-01; Notice PIH 2O23-32; Notice PIH 2O24-34; and Implementing Small Area Fair Market Rents (SAFMR) Guidebook] SAFMRs are FMRs calculated at the ZIP Code level, rather than for an entire metropolitan or non -metropolitan county. HUD identifies which metropolitan areas are required to use SAFMRs based on significant voucher concentration challenges and market conditions. PHAs administering the HCV program in those areas are required to use the SAFMRs when establishing payment standards (mandatory SAFMR PHAs). Mandatory SAFMR PHAs must use the SAFMR for any part of their jurisdiction located in the SAFMR area. Upon notification to HUD, PHAs not located in mandatory SAFMR areas may opt -in and voluntarily adopt SAFMRs for one or more of the FMR areas in which the PHA administers vouchers (opt -in PHAs). A PHA that exercises this option in one metropolitan area or non - metropolitan county is not required to exercise this option in other metropolitan areas or non - metropolitan counties. A PHA that opts in to SAFMRs may subsequently opt out through revision of the administrative plan and notification to HUD. Alternatively, PHAs may elect to use SAFMRs only as the basis for exception payment standards in some or all of those non -mandatory SAFMR areas that cover or are within their jurisdictions. These PHAs are not considered opt -in PHAs. When applicable, SAFMRs apply to all tenant -based vouchers in the PHA's jurisdiction, including special vouchers such as the Veterans Affairs Supportive Housing (VASH) program, the Family Unification Program (FUP), and special housing types such as Single Room Occupancies (SROs) and homeownership vouchers. SAFMRs do not apply to manufactured home space rental. SAHA Policy SAHA is not a mandatory SAFMR PHA. SAHA will not voluntarily adopt the use of SAFMRs except to establish exception payment standards in certain ZIP code areas. ftgv 025 City Council — 679 5 2 25