Section 8 Fair Market Rent (FMR) for ZIP 27516 - 2027

Investment Score for ZIP 27516

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	$1,500
1 Bedroom	$1,560
2 Bedrooms	$1,750
3 Bedrooms	$2,170
4 Bedrooms	$2,490
5 Bedrooms	$2,888
6 Bedrooms	$3,235
7 Bedrooms	$3,494
8 Bedrooms	$3,669

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	$1,560	$319,588	0.49%	F
2BR	$1,750	$392,308	0.45%	F
3BR	$2,170	$523,433	0.41%	F
4BR	$2,490	$742,360	0.34%	F
5BR	$2,888	$954,125	0.3%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 27516 (Carrboro, NC) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) figures for Carrboro, NC, in ZIP code 27516, are set by HUD for the year 2026. These figures are as follows: - 0 Bedroom: $1420 - 1 Bedroom: $1510 - 2 Bedrooms: $1710 (which is 19.3% of the median household income) - 3 Bedrooms: $2120 - 4 Bedrooms: $2530 These FMRs represent the maximum amount that a Section 8 voucher holder can pay for rent. However, the actual rents in Carrboro tend to be higher than these FMRs, especially for properties with two or more bedrooms. For instance, the Zillow median price for a 2-bedroom property is $389,311, which translates into a monthly rental cost significantly above the FMR. The price-to-FMR ratio of 19.0x indicates that the average rental price for a 2-bedroom home is nearly 19 times the FMR, suggesting a substantial gap between what voucher holders can afford and the actual market rates. This gap creates significant constraints for voucher holders, as they may struggle to find suitable housing within their budget. Landlords who accept Section 8 vouchers must agree to rent at or below the FMR, which can be a disincentive given the high market rents in Carrboro. #### Affordability & Renter Profile Carrboro has a population of 47,358, with 29.3% of residents being renters. This indicates a moderate rental market presence. The occupancy rate of 92.4% suggests that the rental market is relatively tight, with few vacant units available. Given the median household income of $106,353, it’s clear that Carrboro is a relatively affluent area. However, the 29.3% of renters might include individuals or families who are less financially secure and rely on government assistance like Section 8 vouchers. The affordability issue is particularly acute for those who receive Section 8 assistance. With the FMR for a 2-bedroom unit being only $1710, compared to the Zillow median price of $389,311, it’s evident that the rental market is not aligned with the financial capabilities of voucher recipients. This misalignment could lead to a situation where voucher holders are forced to live in lower-quality or less desirable neighborhoods, or they may face difficulties finding landlords willing to accept their vouchers due to the low rent ceilings. #### Investor Angle From an investor perspective, the ZIP code 27516 presents both opportunities and challenges. The FMRs are significantly lower than the actual market rents, which means that landlords accepting Section 8 vouchers will likely see reduced cash flow compared to market-rate rentals. For example, a 2-bedroom unit with a Zillow median price of $389,311 would have a market rental value far exceeding the $1710 FMR. However, there are still some potential benefits for investors. The high occupancy rate of 92.4% indicates strong demand for rental properties, and the median household income of $106,353 suggests a robust local economy. Despite the low FMRs, Carrboro’s rental market remains competitive, and investors who can offer quality, affordable housing may attract tenants who do not require vouchers but are still seeking reasonably priced options. Given the tight rental market and the high median household income, the investment grade for Carrboro appears to be good, albeit with a focus on cash flow rather than immediate profitability. Investors should consider the long-term stability and potential appreciation of property values in this area. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Since the FMR for smaller units (0BR and 1BR) is lower and the gap between FMR and market rent is less pronounced, investors might find better cash flow opportunities in these types of units. For instance, a 1-bedroom unit with an FMR of $1510 could still generate decent returns if the property is well-maintained and located in a desirable area. 2. **Consider Mixed-Income Developments**: Developing mixed-income housing projects could help bridge the affordability gap. By offering a mix of market-rate and subsidized units, investors can ensure a steady stream of income while also providing affordable housing options. This strategy aligns with the broader economic profile of Carrboro, where a significant portion of the population can afford market rates, but a smaller segment relies on subsidies. 3. **Engage with Local Housing Authorities**: Building relationships with local housing authorities can provide insights into the availability and distribution of Section 8 vouchers. This knowledge can help investors make informed decisions about whether to accept vouchers and how to structure their rental offerings to maximize occupancy and cash flow. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 27516 is to **Skip**. The significant gap between FMR and market rents makes it challenging to achieve positive cash flow, and the tight rental market may limit the number of available units that can be rented at or below the FMR. Investors looking to enter Carrboro should consider other strategies, such as developing smaller units or mixed-income developments, to better align with the local market dynamics and tenant needs. In summary, while Carrboro offers a strong economic foundation and high demand for rental properties, the specific constraints posed by Section 8 voucher dynamics make it a less favorable option for investors focused solely on this program.

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.