Section 8 Fair Market Rent (FMR) for ZIP 27540 - 2027

Investment Score for ZIP 27540

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	$1,820
1 Bedroom	$1,890
2 Bedrooms	$2,060
3 Bedrooms	$2,570
4 Bedrooms	$3,450
5 Bedrooms	$4,002
6 Bedrooms	$4,482
7 Bedrooms	$4,841
8 Bedrooms	$5,083

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
2BR	$2,060	$301,566	0.68%	D
3BR	$2,570	$421,610	0.61%	D
4BR	$3,450	$634,104	0.54%	F
5BR	$4,002	$789,285	0.51%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 27540 (Holly Springs, NC) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for Holly Springs, NC, in ZIP code 27540, is set by HUD for the year 2026. The FMRs are as follows: - 0BR: $1840 - 1BR: $1920 - 2BR: $2110 (which represents 19.6% of the median household income) - 3BR: $2650 - 4BR: $3540 These figures represent the maximum rent that a Section 8 voucher holder can pay for a unit of a given size. However, it is important to note that the actual rents in the market may exceed these FMRs. For instance, the Zillow median price for a 2BR property is $305,169, which translates into a monthly rental cost significantly higher than the FMR. Given the high median household income of $128,989, many residents can afford to pay above the FMR. The constraints for voucher holders are evident in the high price-to-FMR ratio of 12.1x. This means that the typical market rent for a 2BR property is over twelve times the FMR, making it extremely difficult for voucher holders to find suitable housing within their budget. #### Affordability & Renter Profile With a population of 47,771, Holly Springs has a relatively low percentage of renters at 19.4%, indicating that homeownership is more prevalent in this area. The occupancy rate of 94.5% suggests that the market is quite tight, with most available units being occupied. Given the median household income of $128,989, the majority of residents are likely to be middle to upper-middle class families who can afford higher rents. The 2BR FMR of $2110, representing only 19.6% of the median income, implies that the average resident can comfortably cover the rent without financial strain. However, this also means that the market is less affordable for lower-income individuals who rely on assistance programs like Section 8. #### Investor Angle From an investor’s perspective, the ZIP code 27540 offers mixed prospects when considering Section 8 vouchers. The high median household income and tight market conditions suggest that there is strong demand for rental properties, but the challenge lies in finding tenants willing to accept the lower rents mandated by the FMR. To determine if this ZIP code is cash-flow positive at FMR, we need to consider the typical rental costs and compare them to the FMR. For a 2BR unit, the FMR is $2110, while the market rent is likely much higher due to the price-to-FMR ratio of 12.1x. If an investor were to set the rent at the FMR level, they would be significantly below the market rate, potentially impacting their ability to cover operating expenses and generate profit. However, the high median home value of $305,169 indicates that there is substantial wealth in the area, which could support higher rents. Therefore, the investment grade for this ZIP code is moderate to high, but it depends heavily on the investor’s willingness to accept lower rents for Section 8 tenants or to target the broader market. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors should focus on smaller units such as 0BR or 1BR apartments where the FMR is lower ($1840 and $1920 respectively). These units might be more affordable for voucher holders and could still generate reasonable cash flow due to the tight market conditions. 2. **Consider Mixed Housing Developments**: Investors could develop mixed housing projects that cater to both Section 8 voucher holders and the broader market. By offering a range of unit sizes and rents, they can maximize occupancy and revenue. For example, having a mix of 0BR, 1BR, and 2BR units can help attract different types of tenants. 3. **Explore Government Programs**: Investors should look into government programs that offer incentives for landlords who accept Section 8 vouchers. These programs can help offset the lower rents and provide additional benefits that make the investment more attractive. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 27540 is to **Skip**. The high price-to-FMR ratio and the tight market conditions make it challenging to find properties that can be rented out at the FMR levels and still generate sufficient cash flow. However, investors who are willing to explore mixed housing developments or take advantage of government incentives might find some opportunities to enter the market profitably. Overall, the ZIP code is better suited for investors targeting the broader market rather than those exclusively focusing on Section 8 vouchers.

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.