Section 8 Fair Market Rent (FMR) for ZIP 27705 - 2027

Investment Score for ZIP 27705

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: 2026-07-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
1BR	$1,560	$190,553	0.82%	C
2BR	$1,750	$291,500	0.6%	D
3BR	$2,170	$433,197	0.5%	F
4BR	$2,490	$718,449	0.35%	F
5BR	$2,888	$860,887	0.34%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 27705 (Durham, NC) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 27705 in Durham, NC, is set by HUD for 2026 as follows: - 0BR: $1410 - 1BR: $1500 - 2BR: $1700 - 3BR: $2110 - 4BR: $2530 These figures represent the maximum amount that a Section 8 voucher holder can pay towards rent. However, the actual rental market in 27705 is significantly higher than these FMRs. For instance, the Zillow median price for a 2BR property is $292,306, which translates into a monthly mortgage payment of approximately $1,400 based on typical financing terms. When factoring in property taxes, insurance, and maintenance costs, the total cost to landlords would likely exceed the FMR of $1700 for a 2BR unit. This suggests that voucher holders face significant constraints in finding affordable housing within their budget. Landlords may be hesitant to accept vouchers due to the lower rent ceilings compared to market rates. #### Affordability & Renter Profile ZIP code 27705 has a population of 49,923, with 55.5% of residents being renters. The occupancy rate is high at 90.5%, indicating a tight rental market where demand outstrips supply. Given that 2BR units are priced at $292,306, it is clear that the market is not particularly affordable for most renters, especially those relying on Section 8 vouchers. The median household income of $73,066 means that a 2BR unit at $1700 per month represents 27.9% of the median income, which is within the affordability range but still quite challenging for many households. The high renter percentage and occupancy rate suggest that there is a strong need for rental properties in this area, particularly for those who might benefit from subsidized housing. However, the disparity between FMR and actual market rents indicates that many voucher holders struggle to find suitable housing options. #### Investor Angle From an investor perspective, the cash flow potential at FMR levels is questionable. With a Zillow median price of $292,306 for a 2BR unit, the price-to-FMR ratio is 14.3x, meaning that the purchase price is nearly 14 times the FMR for a 2BR unit. This high ratio implies that the cost of acquiring a property is far greater than the potential rental income from a Section 8 tenant. Moreover, the actual market rents are much higher than the FMRs. A landlord could potentially charge around $1,800 to $2,000 per month for a 2BR unit, which is well above the FMR of $1700. This means that landlords accepting Section 8 vouchers would be leaving money on the table compared to what they could earn from market-rate tenants. Given these factors, the investment grade for properties in 27705 when considering only Section 8 tenants is low. The tight rental market and high demand for housing could make it difficult to fill vacancies with voucher holders, especially when there are more lucrative options available. #### Specific Actionable Insights 1. **Targeting Specific Units**: Investors should focus on smaller units like 0BR and 1BR apartments, where the FMRs are lower ($1410 and $1500 respectively). These units are more likely to be affordable for voucher holders and may have better occupancy rates due to the high demand for rental properties in this area. 2. **Mixed Tenant Strategy**: To maximize cash flow and minimize risk, investors could adopt a mixed tenant strategy. This involves renting some units to market-rate tenants and others to Section 8 voucher holders. By doing so, they can balance the lower rents from voucher holders with the higher rents from market-rate tenants. 3. **Location-Specific Opportunities**: Within ZIP code 27705, certain neighborhoods may offer better opportunities for Section 8 tenants. Areas closer to public transportation, universities, or other amenities that attract lower-income renters could be more viable for accepting vouchers. #### Bottom Line For investors focusing solely on Section 8 tenants, the recommendation for ZIP code 27705 is to **skip**. The high price-to-FMR ratio and the tight rental market make it less attractive for properties that rely exclusively on voucher holders. However, if investors are willing to consider a mixed tenant approach or target smaller units, then a **hold** position might be appropriate. Otherwise, the financial constraints and limited availability of suitable housing make this a challenging market for Section 8-focused investments.

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.