Section 8 Fair Market Rent (FMR) for ZIP 27405 - 2027

Investment Score for ZIP 27405

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	$1,070
1 Bedroom	$1,110
2 Bedrooms	$1,210
3 Bedrooms	$1,570
4 Bedrooms	$1,840
5 Bedrooms	$2,134
6 Bedrooms	$2,390
7 Bedrooms	$2,581
8 Bedrooms	$2,710

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
1BR	$1,110	$125,240	0.89%	C
2BR	$1,210	$149,333	0.81%	C
3BR	$1,570	$222,001	0.71%	D
4BR	$1,840	$293,843	0.63%	D
5BR	$2,134	$182,909	1.17%	B

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 27405 (Greensboro, NC) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 27405 is set by HUD for 2026. For a two-bedroom apartment, the FMR is $1260 per month. This figure represents 31.9% of the median household income in the area, which is $47,431. The FMR is designed to reflect the average rent that voucher holders can afford in the local rental market. However, the actual rents in the market often exceed these figures. According to Zillow, the median price for a two-bedroom home in ZIP 27405 is $150,950. When we convert this into a monthly rental cost using the Price-to-FMR ratio of 10.0x, the implied monthly rent would be around $1260 ($150,950 / 10.0 / 12). This suggests that the actual rents in the market might be higher than the FMR, creating a challenge for voucher holders who must find housing within their allocated amount. The gap between the FMR and the actual rents could lead to difficulties for tenants in securing affordable housing, especially if landlords do not accept vouchers due to the perception of lower returns compared to market rates. #### Affordability & Renter Profile ZIP code 27405 has a significant population of renters, with 51.5% of households being renters. The occupancy rate stands at 92.6%, indicating a relatively tight market where most available units are occupied. Given the median household income of $47,431, the affordability of housing is a critical issue for many residents. The median household income is notably low, suggesting that many residents have limited financial resources. With 31.9% of the median income going towards a two-bedroom apartment, it leaves little room for other expenses such as utilities, food, and transportation. This tight budget constraint means that the majority of renters are likely to be low-income families, seniors, or individuals who rely on government assistance like Section 8 vouchers to meet their housing needs. Given the high percentage of renters and the relatively low income levels, the demand for affordable housing is strong. However, the tight occupancy rate indicates that supply is not keeping up with demand, leading to potential competition among renters and possibly driving rents above the FMR. #### Investor Angle From an investor perspective, the key question is whether properties in ZIP 27405 can generate positive cash flow when rented at the FMR. Based on the data provided, the FMR for a two-bedroom unit is $1260. To determine if this is cash-flow positive, we need to consider the typical operating costs associated with rental properties, including mortgage payments, property taxes, insurance, maintenance, and utilities. Assuming a conservative estimate of 50% of the FMR for operating costs, the net income would be approximately $630 per month for a two-bedroom unit. This is a reasonable starting point, but investors should also factor in vacancy rates, which can vary widely depending on market conditions. If the vacancy rate is low, the likelihood of maintaining steady cash flow increases. In terms of investment grade, ZIP 27405 appears to be a moderate-risk investment. The strong demand for rental properties, coupled with a high occupancy rate, suggests stability. However, the reliance on government assistance programs like Section 8 means that investors must be prepared for the administrative requirements and potential delays associated with voucher processing. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high proportion of renters and the relatively low median income, smaller units like one-bedroom apartments might be more attractive to investors. The FMR for a one-bedroom unit is $1150, which could still provide positive cash flow while being more affordable for low-income tenants. Additionally, smaller units tend to have higher occupancy rates, reducing the risk of vacancies. 2. **Consider Multi-family Properties**: Multi-family properties can offer economies of scale and potentially higher returns. A three-bedroom unit has an FMR of $1610, which is significantly higher than the two-bedroom FMR. Investors could look into acquiring multi-family buildings where they can rent out larger units at higher FMRs, thereby increasing overall cash flow. 3. **Engage with Local Housing Authorities**: To ensure a steady stream of tenants, investors should establish relationships with local housing authorities. These authorities manage the distribution of Section 8 vouchers and can help connect investors with eligible tenants. This approach can mitigate some of the risks associated with vacancy and ensure a consistent income stream. #### Bottom Line For Section 8-focused investors, ZIP 27405 presents a mixed picture. While there is strong demand for affordable housing and a high occupancy rate, the challenge lies in finding properties that can be rented at or below the FMR without compromising on quality. Given the data, the recommendation is to **Hold** on to existing investments in this ZIP code but be cautious about new acquisitions. Focus on smaller units and multi-family properties to maximize cash flow and ensure compliance with Section 8 requirements. Engaging with local housing authorities is crucial to maintain a steady tenant pipeline and navigate the complexities of voucher management.

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.