Section 8 Fair Market Rent (FMR) for ZIP 25512 - 2027

FY 2027 Fair Market Rent Rates

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

The analysis of the Section 8 cap-rate picture for ZIP code 25512 reveals a significant disparity between the Federal Market Rent (FMR) and the actual market rent levels, impacting potential investment yields.

Annualizing the 2-bedroom FMR at $910 per month for FY 2024 suggests an annual rental income of $10,920. In contrast, the market rent figure of $695 per month translates to an annual rental income of $8,340. Using the median home value of $106,155 as a basis, we can derive the gross yield for both scenarios.

For the FMR scenario, the gross yield is calculated as follows:

• Gross Yield (FMR): ($10,920 / $106,155) * 100 = approximately 10.29%

For the market rent scenario, the gross yield is:

• Gross Yield (Market Rent): ($8,340 / $106,155) * 100 = approximately 7.86%

Given the 18.6% renter density in ZIP 25512, it is important to consider the likelihood of finding tenants willing to pay the FMR versus those paying the market rent. The N/A-day DOM (days on market) indicates incomplete data regarding the speed at which properties are rented, but the low renter density suggests that finding tenants at the higher FMR rate could be challenging.

The higher gross yield based on FMR is theoretically attractive but less likely to materialize consistently in practice due to the limited number of renters. Therefore, the more realistic scenario for landlords and small-portfolio investors would be to anticipate a gross yield closer to the market rent figure of 7.86%, reflecting the actual rental dynamics in the area.

Data Sources: FMR data from HUD (2027). 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.