Section 8 Fair Market Rent (FMR) for ZIP 14120 - 2027

Investment Score for ZIP 14120

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	$1,110
1 Bedroom	$1,130
2 Bedrooms	$1,340
3 Bedrooms	$1,630
4 Bedrooms	$1,860
5 Bedrooms	$2,158
6 Bedrooms	$2,417
7 Bedrooms	$2,610
8 Bedrooms	$2,741

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
2BR	$1,340	$215,950	0.62%	D
3BR	$1,630	$283,396	0.58%	F
4BR	$1,860	$374,596	0.5%	F
5BR	$2,158	$374,208	0.58%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 14120 (North Tonawanda, NY) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for North Tonawanda, NY, as of 2026, is set at $1270 for a two-bedroom unit. This figure represents 20.4% of the median household income of $74,871 in the area. However, the actual rental prices in the market can be significantly higher. For instance, the Zillow median price for a two-bedroom rental property is $203,737, which translates to a monthly rent of approximately $1698 based on typical mortgage calculations. This means that the actual rent is nearly 1.34 times the FMR, as indicated by the price-to-FMR ratio of 13.4x. Consequently, tenants who rely on Section 8 vouchers face significant constraints in finding affordable housing within the FMR limits. The disparity between FMR and actual rents makes it challenging for voucher holders to secure suitable accommodation without landlords absorbing some of the cost difference. #### Affordability & Renter Profile With a population of 44,241, North Tonawanda has a relatively high occupancy rate of 95.6%, suggesting a tight rental market. Approximately 27.5% of the population are renters, indicating a substantial demand for rental properties. Given the median household income of $74,871, the affordability of rental units becomes a critical issue. The FMR for a two-bedroom unit at $1270 is indeed a reasonable portion of the median income, but the actual rents being much higher pose a challenge for low-income families. These families often have to choose between living in less desirable areas or paying a larger share of their income towards rent, which can strain their budgets and reduce their ability to afford other necessities. #### Investor Angle From an investor perspective, the ZIP code 14120 presents both opportunities and challenges. The FMR for a two-bedroom unit is $1270, which is significantly lower than the actual median rent of $1698. This means that if an investor purchases a property and rents it out at the FMR, they would likely incur a loss unless they can find ways to reduce operating costs or leverage subsidies. The high price-to-FMR ratio of 13.4x indicates that the market is overpriced relative to the government-set FMRs, making it difficult for investors to achieve positive cash flow solely through Section 8 vouchers. In terms of investment grade, the ZIP code 14120 would be considered a moderate risk due to the tight rental market and the potential difficulty in attracting tenants who can afford the higher rents. Investors should carefully consider the local economic conditions and the availability of alternative funding sources or incentives to offset the financial gap between FMR and actual rents. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors might want to focus on smaller units such as one-bedroom or studio apartments. The FMR for a one-bedroom unit is $1080, which is closer to the actual rents in the area. This could help mitigate the financial gap and improve the chances of positive cash flow. 2. **Seek Government Subsidies**: Investors should explore additional government subsidies or programs that can help bridge the gap between FMR and actual rents. For example, the Housing Choice Voucher Program (Section 8) provides assistance to low-income families, but there may be other local or state-level programs that offer further support. 3. **Consider Renovation Projects**: Investing in properties that require renovation can be a strategic move. By purchasing a distressed property at a lower price point and then renovating it to meet modern standards, investors can potentially increase the rental value while still maintaining affordability within the FMR guidelines. This approach requires a careful assessment of renovation costs and projected rental income. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 14120 is to **Skip**. The high price-to-FMR ratio and the tight rental market make it challenging to achieve positive cash flow purely through Section 8 vouchers. While there is a significant demand for rental properties, the gap between FMR and actual rents suggests that investors would need to absorb considerable losses or seek additional subsidies to remain financially viable. Therefore, investors looking to capitalize on the Section 8 program in this area should carefully weigh these factors before committing to any investments.

Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). 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.