Section 8 Fair Market Rent (FMR) for ZIP 28601 - 2027

Investment Score for ZIP 28601

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	$1,110
1 Bedroom	$1,110
2 Bedrooms	$1,320
3 Bedrooms	$1,610
4 Bedrooms	$1,960
5 Bedrooms	$2,274
6 Bedrooms	$2,547
7 Bedrooms	$2,751
8 Bedrooms	$2,889

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	$1,110	$184,617	0.6%	D
2BR	$1,320	$199,422	0.66%	D
3BR	$1,610	$298,673	0.54%	F
4BR	$1,960	$487,057	0.4%	F
5BR	$2,274	$671,217	0.34%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 28601 (Hickory, NC) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 28601 in Hickory, North Carolina, is set by HUD for 2026. The FMRs are as follows: - 0BR: $990 - 1BR: $1040 - 2BR: $1260 (which represents 22.3% of the median household income) - 3BR: $1580 - 4BR: $1910 To understand how these FMRs compare to actual rents, we need to consider the price-to-FMR ratio. For a 2BR unit, the Zillow median price is $195,786, which translates to a monthly rent of approximately $1,631 based on typical mortgage payments. This means that the actual rent is about 12.9 times higher than the FMR for a 2BR unit. This significant disparity creates several constraints for voucher holders. First, finding units that accept vouchers becomes challenging due to the high demand and limited supply of affordable housing. Second, voucher holders may struggle to find units where the rent does not exceed their voucher amount, especially for larger units like 3BR and 4BR. For example, a 3BR unit with an actual rent of $1,631 would be well above the FMR of $1,580, leaving a substantial gap that tenants would have to cover out-of-pocket. #### Affordability & Renter Profile ZIP code 28601 has a population of 53,329, with 31.6% of residents being renters. The occupancy rate stands at 91.1%, indicating a relatively tight rental market. Given that the median household income is $67,817, it’s clear that the majority of renters are likely to be low-income individuals who rely heavily on government assistance such as Section 8 vouchers. The affordability of housing is a critical issue in this area. With the FMR for a 2BR unit being only $1,260, which is 22.3% of the median income, many residents might find it difficult to afford even modestly priced rentals without financial aid. This tight market suggests that there is a strong demand for affordable housing, but the supply is insufficient to meet the needs of all low-income renters. #### Investor Angle From an investor perspective, the ZIP code 28601 presents both opportunities and challenges. The FMRs set by HUD provide a benchmark for what the government considers reasonable rent levels for various unit sizes. However, the actual rents in the market are significantly higher, making it difficult to achieve positive cash flow strictly based on FMRs. For instance, a 2BR unit with an actual rent of $1,631 would generate a monthly cash flow of $371 if rented at the FMR of $1,260. This positive cash flow is attractive, but it assumes that the unit can be rented at the FMR, which is unlikely given the current market conditions. Additionally, the high price-to-FMR ratio of 12.9x indicates that the property values are much higher than the rent levels supported by the FMR, suggesting that investors would need to consider the broader rental market dynamics rather than just the FMR when pricing their properties. The investment grade in this area is mixed. On one hand, the strong demand for rental properties could support higher rents and potentially better returns. On the other hand, the reliance on government assistance programs like Section 8 means that investors must navigate the complexities of these programs, including potential delays in payment processing and the requirement to adhere to strict guidelines. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, smaller units like 0BR and 1BR are more likely to be rented at or near the FMR. Investors should consider acquiring or developing properties that offer these unit types to maximize the chances of renting them at the FMR and achieving positive cash flow. For example, a 1BR unit with an FMR of $1,040 could be rented at this price point, providing a solid return relative to the lower costs associated with smaller units. 2. **Target Affordable Housing Projects**: Since the FMR for a 2BR unit is only 22.3% of the median income, there is a significant opportunity to develop or acquire affordable housing projects that cater specifically to low-income renters. This strategy aligns with the needs of the local population and can benefit from government incentives and subsidies aimed at increasing affordable housing stock. 3. **Consider Mixed-Income Developments**: To balance the tight rental market and the high actual rents, investors might want to explore mixed-income developments. These projects combine units that are rented at FMR levels with units that are rented at market rates. By doing so, investors can ensure that they have a steady stream of income while also contributing to the community’s need for affordable housing. #### Bottom Line For Section 8-focused investors, ZIP code 28601 presents a mixed scenario. While there is a strong demand for affordable housing, the high price-to-FMR ratio makes it challenging to achieve positive cash flow solely through FMR-based rents. Therefore, the recommendation is to **Hold** investments in this area, focusing on smaller units and mixed-income developments to balance the financial risks and rewards. Investors should also be prepared to navigate the complexities of government assistance programs and consider the broader rental market dynamics to ensure successful property management and financial performance.

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.