Section 8 Fair Market Rent (FMR) for ZIP 10912 - 2027

FY 2027 Fair Market Rent Rates

To determine if you should buy in ZIP code 10912 for Section 8 investment, follow this decision tree:

• 1) Does FMR $1860 (zip FY 2024) clear debt service on a property?
  • Yes: If the Fair Market Rent (FMR) of $1860 is sufficient to cover your debt service, which includes mortgage payments, property taxes, insurance, and maintenance costs, then the investment could be viable. However, without knowing the specifics of the property's debt service, this cannot be conclusively determined.
  • No: If the FMR does not cover the debt service, purchasing a property in this ZIP code would likely result in financial losses. The landlord must ensure that the FMR can sustainably support the operational costs of the property.
• 2) Is market rent above, at, or below FMR?
  • Above: If the market rent exceeds the FMR of $1860, landlords could consider renting to non-Section 8 tenants to maximize income. This scenario indicates strong rental demand and potentially higher profitability outside of the Section 8 program.
  • At: When market rent equals the FMR, landlords can expect to receive the full amount of the FMR in rent, making it a straightforward decision for those interested in Section 8 investments.
  • Below: If market rent is below the FMR, landlords might still find the area attractive for Section 8 investments as they can charge the higher FMR rate. However, this could also indicate weaker rental demand, which might affect occupancy rates.
• 3) Are the percentage of renters and days on market enough to meet demand?
  • Yes: A high percentage of renters and low days on market (DOM) suggest strong demand for rentals in this area. This environment supports quicker property turnovers and higher occupancy rates, beneficial for Section 8 landlords.
  • No: Low percentages of renters or high DOM indicate weak demand, which could lead to prolonged vacancies and lower returns on investment. Landlords should carefully assess the local rental market conditions before proceeding.
  • It Depends: Moderate figures for both metrics might mean that while there is some demand, it is not consistently strong. Landlords will need to balance the potential benefits of Section 8 against the risks of occasional vacancy periods.

Note: Due to the lack of specific data points such as the exact market rent and the percentage of renters along with the days on market, these decisions require further investigation tailored to individual properties and market conditions in ZIP 10912.

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.