Section 8 Fair Market Rent (FMR) for ZIP 28229 - 2027

FY 2027 Fair Market Rent Rates

The analysis for ZIP code 28229 reveals key insights into the potential returns for landlords and small-portfolio investors interested in the Section 8 program.

The Fair Market Rent (FMR) for a two-bedroom apartment in ZIP 28229 for fiscal year 2024 is set at an annualized rate of $1650. This figure represents the government's benchmark for rental assistance payments under the Section 8 Housing Choice Voucher program. However, the median home value and market rent for the area are currently unavailable, indicating a need for further research to provide a comprehensive analysis.

Given the FMR, we can calculate the implied gross yield for a landlord participating in the Section 8 program. The gross yield is calculated by dividing the annual rental income by the property value. With the FMR of $1650 per month, the annual rental income would be $19,800. Since the median home value is not available, let's assume a hypothetical scenario where the median home value is $250,000. In this case, the implied gross yield would be approximately 7.92% ($19,800 / $250,000).

In contrast, the market rent for ZIP 28229 is also currently unavailable. To estimate a gross yield based on market conditions, we would need the average market rent for a two-bedroom apartment. Assuming the market rent is higher than the FMR, say $2000 per month, the annual rental income would be $24,000. Using the same median home value of $250,000, the implied gross yield from market rents would be 9.6% ($24,000 / $250,000).

The difference between these yields highlights the trade-offs between participating in the Section 8 program and renting at market rates. While the gross yield from market rents is higher, the stability and reliability of rental income from Section 8 vouchers might be more attractive to some investors.

Without specific data on renter density and days on market (DOM), it's challenging to determine which scenario is more realistic. Typically, areas with high renter density and shorter DOM suggest a stronger preference for market-rate rentals. Conversely, longer DOM and lower renter density might indicate that Section 8 tenants are more common and preferred by landlords.

To make a concrete decision, investors should gather local market data on renter demographics and rental trends. This will help them understand the balance between the guaranteed income from Section 8 and the potentially higher yields from market-rate rentals.

Data Sources: FMR data from HUD (2027).

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.