Section 8 Fair Market Rent (FMR) for ZIP 27520 - 2027

Investment Score for ZIP 27520

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	$1,450
1 Bedroom	$1,510
2 Bedrooms	$1,640
3 Bedrooms	$2,040
4 Bedrooms	$2,740
5 Bedrooms	$3,178
6 Bedrooms	$3,559
7 Bedrooms	$3,844
8 Bedrooms	$4,036

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
2BR	$1,640	$229,566	0.71%	D
3BR	$2,040	$319,563	0.64%	D
4BR	$2,740	$423,651	0.65%	D
5BR	$3,178	$504,894	0.63%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 27520 (Clayton, NC) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 27520, as of 2026, is set at $1630 for a two-bedroom unit. This amount represents 22.7% of the median household income of $86,322, indicating that it is within a reasonable range for affordability. However, the actual rent for a two-bedroom unit in Clayton, NC, as per Zillow, is $229,464, which is significantly higher than the FMR. The price-to-FMR ratio of 11.7x suggests that the actual rental prices are much higher than what the government considers fair market rates. For voucher holders, this means that they will face significant constraints in finding units that accept their vouchers and fall within the FMR limits. Given the high actual rental prices, landlords who accept Section 8 vouchers might be limited in their ability to charge above the FMR without risking tenant loss. #### Affordability & Renter Profile With a population of 48,014 and a 25.7% renter rate, Clayton, NC, has a substantial number of renters. The median household income of $86,322 indicates that the area is relatively affluent, but the occupancy rate of 95.7% suggests that there is little vacancy, making it a tight market. The high occupancy rate combined with the high actual rental prices implies that the market is competitive and likely undersupplied, particularly for affordable housing options. The 25.7% renter rate also indicates that while a significant portion of the population rents, it is not overwhelmingly dominated by renters, meaning that there is a mix of homeowners and renters. #### Investor Angle From an investor’s perspective, the ZIP code 27520 presents a challenging scenario. The actual rental prices are far above the FMR, suggesting that the market is driven by factors other than government-set rent guidelines. For an investor focusing on Section 8 vouchers, the cash flow would be constrained by the FMR limits. A landlord accepting a Section 8 voucher for a two-bedroom unit would receive $1630 per month, whereas the market rate is $229,464 annually, or approximately $19,120 per month. This stark difference highlights the financial limitations for those relying solely on Section 8 vouchers. The investment grade in this area would be considered low for Section 8-focused investors due to the high market rates and the likelihood of lower returns compared to market-rate rentals. However, the strong demand for rentals, evidenced by the high occupancy rate, could still make the area attractive for investors willing to accept lower returns in exchange for steady tenants. #### Specific Actionable Insights 1. **Focus on Affordable Units**: Investors should consider targeting properties that can be rented at or near the FMR levels. For instance, a two-bedroom unit priced at $1630 per month would be more likely to attract Section 8 voucher holders. This strategy would ensure compliance with voucher requirements and potentially provide a more stable tenant base. 2. **Consider Multi-Family Properties**: Given the high occupancy rate, multi-family properties might offer better opportunities for cash flow. While individual units may have lower rents due to FMR constraints, the overall portfolio could still generate sufficient income if managed effectively. For example, a four-unit property with two-bedroom units could bring in $6,520 per month ($1630 x 4), which is still a considerable sum. 3. **Explore Government Programs**: Investors might want to look into additional government programs that can supplement the income from Section 8 vouchers. These could include Low-Income Housing Tax Credits (LIHTC) or other subsidies that help bridge the gap between FMR and market rates. #### Bottom Line Given the high market rental prices and the tight market conditions, the recommendation for Section 8-focused investors is to **Skip** this ZIP code unless they are willing to accept significantly lower returns compared to market-rate rentals. The high price-to-FMR ratio makes it difficult to achieve positive cash flow purely through Section 8 vouchers. However, for investors interested in long-term, stable tenancy and willing to explore supplementary government programs, there might still be opportunities, albeit limited.

Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.