Section 8 Fair Market Rent (FMR) for ZIP 10106 - 2027

FY 2027 Fair Market Rent Rates

To determine if you should buy in ZIP code 10106 for Section 8 investment, follow this decision tree based on the provided data.

1) Does the Fair Market Rent (FMR) of $3450 cover the debt service on your property?

• Yes: If the FMR of $3450 is sufficient to cover your debt service, proceed to the next step. This means that the rental income from a Section 8 tenant will meet your financial obligations.
• No: If the FMR of $3450 does not cover your debt service, buying in ZIP 10106 for Section 8 purposes is not advisable. The rental income would be insufficient to support the property financially.

2) How does the market rent compare to the FMR?

• Above FMR: If the market rent is higher than the FMR of $3450, it indicates a strong local rental market. However, you must still ensure that the FMR can cover your debt service. If so, the potential for additional income beyond Section 8 may exist.
• At FMR: If the market rent equals the FMR of $3450, then the rental income will precisely match what is needed to cover your debt service, assuming you answered "Yes" to the first question. There is no buffer for unexpected expenses or downturns in the market.
• Below FMR: If the market rent is lower than the FMR of $3450, it suggests that the rental market might be weaker than the federal guidelines indicate. However, since the FMR is designed to reflect the area's average rental costs, this scenario is less likely. Ensure that the actual market rent still covers your debt service before investing.

3) Is there sufficient demand for rentals in ZIP 10106?

• It Depends: With the percentage of renters and days on the market (DOM) unspecified, it's challenging to give a definitive answer. Generally, a high percentage of renters and low DOM suggest strong demand, while the opposite indicates weak demand. For instance, if 70% of residents are renters and the DOM is around 15 days, there is likely strong demand. Conversely, if only 30% are renters and the DOM is over 60 days, demand is weak. Without these specifics, you must evaluate other local market indicators such as vacancy rates, population growth, and employment trends.

Note: The analysis above is contingent upon having accurate data regarding the percentage of renters and days on the market for ZIP 10106. These metrics are crucial for understanding the local rental market dynamics and making informed investment decisions.

Data Sources: FMR data from HUD (2027).

About FMR: Fair Market Rent (FMR) is used to determine payment standards for the Section 8 Housing Choice Voucher program, initial renewal rents for some expiring project-based Section 8 contracts, and rent ceilings for HOME Investment Partnerships.