Section 8 Fair Market Rent (FMR) for ZIP 27102 - 2027

FY 2027 Fair Market Rent Rates

The decision to invest in ZIP code 27102 for Section 8 properties hinges on several key factors, which can be evaluated through a structured decision tree approach.

1) Does the Fair Market Rent (FMR) of $1140 cover debt service?

• Yes: If the FMR of $1140 is sufficient to cover the total debt service (including mortgage payments, property taxes, insurance, and maintenance costs), then the investment is financially viable. This means that the rental income will meet or exceed the financial obligations of owning the property.
• No: If the FMR does not cover the debt service, the property would result in a loss. In this case, investing in ZIP 27102 for Section 8 purposes would not be recommended.

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

• Above FMR: If the market rent is higher than $1140, the property could potentially generate additional income beyond what is covered by the Section 8 voucher program. However, if the gap between market rent and FMR is too large, it may be challenging to find tenants willing to pay the difference.
• At FMR: If the market rent is exactly $1140, the property will only generate the income equivalent to the FMR. This scenario is straightforward but offers no margin for unexpected expenses or economic downturns.
• Below FMR: If the market rent is lower than $1140, the property may still be a good investment as long as the FMR covers the debt service. This indicates that the property's rent aligns well with the local housing market and the government subsidy.

3) Is there enough demand?

• It depends: The demand for rentals in ZIP 27102 is influenced by the percentage of renters and the Days on Market (DOM) figure. Without specific percentages and DOM data, it's difficult to make a definitive call. If the percentage of renters is high and the DOM is low, it suggests strong demand and a good opportunity for occupancy. Conversely, low renter percentages and high DOM indicate weaker demand, which could lead to vacancy issues.

To conclude, a landlord should first ensure that the FMR of $1140 clears the debt service. Next, they must assess whether the market rent is competitive. Finally, understanding the local rental market dynamics, including the percentage of renters and DOM, will provide insight into the potential for maintaining occupancy. These steps will guide the decision-making process regarding an investment in ZIP 27102 for Section 8 properties.

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.