Section 8 Fair Market Rent (FMR) for ZIP 12550 - 2027

Investment Score for ZIP 12550

Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)

FY 2027 Fair Market Rent Rates

Unit Size	Monthly FMR
Studio	$1,420
1 Bedroom	$1,590
2 Bedrooms	$2,040
3 Bedrooms	$2,570
4 Bedrooms	$2,700
5 Bedrooms	$3,132
6 Bedrooms	$3,508
7 Bedrooms	$3,789
8 Bedrooms	$3,978

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
1BR	$1,590	$183,000	0.87%	C
2BR	$2,040	$309,182	0.66%	D
3BR	$2,570	$409,883	0.63%	D
4BR	$2,700	$520,763	0.52%	F
5BR	$3,132	$520,742	0.6%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 12550 (Newburgh, NY) #### Section 8 Voucher Dynamics In ZIP code 12550, the Fair Market Rent (FMR) for a two-bedroom apartment is set at $1880 per month according to the 2026 figures. This amount represents 26.3% of the median household income in Newburgh, which stands at $85,697. The FMR is designed to ensure that housing costs do not exceed a reasonable portion of a household’s income. However, the actual rental market in Newburgh tends to be higher than the FMR. For instance, the Zillow median price for a two-bedroom home is $297,712, which translates to a monthly rent of approximately $1324 based on a 5% annual return on investment. This implies a significant gap between the FMR and the actual market rent, as the price-to-FMR ratio is 13.2x. The constraints for voucher holders are evident. With the FMR being significantly lower than the actual market rent, many voucher holders might struggle to find suitable housing within their budget. Landlords may be hesitant to accept vouchers due to the higher market rates, leading to a potential mismatch between available housing and what voucher holders can afford. #### Affordability & Renter Profile Newburgh has a population of 55,152, with 44.2% of residents being renters. This indicates a substantial demand for rental properties in the area. The occupancy rate of 91.2% suggests that the rental market is relatively tight, with few vacant units available. Given the high percentage of renters and the occupancy rate, it is likely that competition for rental units is strong, especially among those who rely on Section 8 vouchers. The median household income of $85,697 provides context for the affordability of housing. While the FMR for a two-bedroom unit is $1880, which is 26.3% of the median income, the actual market rent is much higher. This makes it challenging for low-income households to find affordable housing without assistance. The high rent-to-income ratio also suggests that there is a significant portion of the population that may be financially stretched by housing costs, even with vouchers. #### Investor Angle From an investor perspective, the ZIP code 12550 offers mixed opportunities. The FMR for a two-bedroom unit is $1880, but the actual market rent is closer to $1324 based on the Zillow median price. This means that if an investor were to purchase a property at the median price and rent it out at the FMR, they would likely see a positive cash flow. However, the gap between the FMR and the actual market rent indicates that the investment grade could be lower if the investor aims to compete with the local rental market. Given the high price-to-FMR ratio of 13.2x, investors should consider the potential risks associated with relying solely on Section 8 vouchers. While the FMR ensures a stable income stream, the high cost of entry into the market might offset the benefits for some investors. Additionally, the tight rental market and high occupancy rate suggest that there is a strong demand for rental properties, but the challenge lies in finding properties that are both affordable and suitable for voucher holders. #### Specific Actionable Insights 1. **Focus on Affordable Properties**: Investors should focus on acquiring properties that are priced below the Zillow median. For example, purchasing a two-bedroom property for less than $297,712 would allow them to rent it out at the FMR of $1880 and still achieve a positive cash flow. This strategy would help mitigate the risk associated with the high price-to-FMR ratio. 2. **Consider Multi-Family Units**: Given the high demand for rental properties and the tight market, investing in multi-family units could provide a more stable and diversified income stream. The FMR for larger units (three-bedroom and four-bedroom) is $2390 and $2560 respectively, which are still below the median income threshold. This could make these units more attractive to voucher holders and potentially reduce vacancy rates. 3. **Engage with Local Housing Authorities**: Building relationships with local housing authorities can help ensure a steady stream of voucher holders. This is particularly important given the high price-to-FMR ratio and the potential difficulty in finding suitable housing. Engaging with housing authorities can also provide insights into upcoming changes in FMR and other local policies that could impact the rental market. #### Bottom Line For Section 8-focused investors, the ZIP code 12550 presents a challenging yet potentially rewarding market. The high price-to-FMR ratio suggests that buying at the median price may not yield optimal returns. However, focusing on affordable properties and multi-family units can provide a more stable investment opportunity. The recommendation for this ZIP code is to **Hold** if you already own properties in the area, but **Skip** if you are looking to enter the market at the current median prices. If you can find properties priced below the Zillow median, then **Buy** could be a viable option.

Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). Demographics from U.S. Census (2024).

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.