Section 8 Fair Market Rent (FMR) for ZIP 29720 - 2027

Investment Score for ZIP 29720

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	$890
1 Bedroom	$930
2 Bedrooms	$1,010
3 Bedrooms	$1,390
4 Bedrooms	$1,690
5 Bedrooms	$1,960
6 Bedrooms	$2,195
7 Bedrooms	$2,371
8 Bedrooms	$2,490

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	$1,010	$205,897	0.49%	F
3BR	$1,390	$306,071	0.45%	F
4BR	$1,690	$455,106	0.37%	F
5BR	$1,960	$566,685	0.35%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 29720 (Lancaster, SC) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 29720 in Lancaster, SC, is set by HUD for 2026 as follows: - 0BR: $870 - 1BR: $890 - 2BR: $1,000 - 3BR: $1,370 - 4BR: $1,610 These figures represent the maximum amount that a Section 8 voucher holder can pay for rent. However, the actual rents in the area significantly exceed these FMRs. For instance, the Zillow median price for a 2BR unit is $203,985, which translates to a monthly mortgage payment of approximately $930 based on a 4.5% interest rate and a 30-year term. This is already above the 2BR FMR of $1,000. The price-to-FMR ratio of 17.0x indicates that the median home value is much higher than the FMR, suggesting that actual rental costs are likely to be well above the FMR levels. Given these dynamics, Section 8 voucher holders face significant constraints. They must find landlords willing to accept lower rent payments or navigate the limited supply of affordable units. The high price-to-FMR ratio suggests that many properties are priced beyond what voucher holders can afford, leading to potential difficulties in securing housing. #### Affordability & Renter Profile ZIP code 29720 has a population of 53,584, with 20.2% of residents being renters. The median household income in the area is $62,969. According to the FMR data, a 2BR unit at $1,000 would consume 19.1% of the median income, which is relatively affordable but still represents a substantial portion of a household’s budget. With an occupancy rate of 90.6%, the market appears to be moderately tight. There is a strong demand for housing, and the limited availability of units priced at or below FMR levels could make it challenging for low-income renters to find suitable accommodation. Given the high price-to-FMR ratio, the market is likely oversupplied with homes that are too expensive for Section 8 voucher holders, creating a mismatch between demand and affordability. #### Investor Angle From an investor perspective, the ZIP code 29720 presents a mixed picture. The FMRs are set at levels that are considerably lower than the actual market rents. A 2BR unit with a median price of $203,985 would have a monthly mortgage payment of around $930, which is already above the 2BR FMR of $1,000. This means that landlords who rely on Section 8 vouchers will likely struggle to cover their mortgage payments and other expenses solely through rental income. To determine if the ZIP code is cash-flow positive at FMR, we need to consider additional costs such as property taxes, insurance, maintenance, and utilities. Assuming a conservative estimate of $200 per month for these additional costs, the total cost for a landlord would be approximately $1,130 ($930 + $200). This exceeds the 2BR FMR of $1,000, indicating that landlords would need to supplement their income through other means, such as government subsidies or additional sources of revenue. In terms of investment grade, the high price-to-FMR ratio and the tightness of the market suggest that investing in this ZIP code with a focus on Section 8 tenants would be challenging. The mismatch between the FMR and actual market rents implies that there is a risk of not finding enough tenants who can utilize the vouchers effectively, leading to potential vacancies and financial strain. #### Specific Actionable Insights 1. **Target Affordable Units**: Investors should focus on acquiring properties that are priced closer to the FMR levels. For example, a 2BR unit priced at $150,000 would have a monthly mortgage payment of about $675, leaving room for additional costs and still staying within the FMR limit. This strategy would ensure that the investment remains cash-flow positive while catering to the needs of Section 8 voucher holders. 2. **Seek Government Subsidies**: Given the high price-to-FMR ratio, investors should explore additional government subsidies or programs that can help bridge the gap between FMR and actual market rents. This could include Low-Income Housing Tax Credits (LIHTC), Community Development Block Grants (CDBG), or other local incentives designed to support affordable housing. 3. **Diversify Tenant Base**: To mitigate the risks associated with relying solely on Section 8 tenants, investors might consider diversifying their tenant base. This could involve renting to a mix of voucher holders and other low-income individuals who might be able to pay slightly above FMR rates. By doing so, investors can balance their income streams and reduce the likelihood of financial strain. #### Bottom Line Based on the provided data, the recommendation for Section 8-focused investors in ZIP code 29720 is to **Skip** this market. The high price-to-FMR ratio and the tightness of the market indicate that it would be difficult to find properties that are both affordable and profitable. While there is a significant number of renters in the area, the mismatch between FMR and actual market rents makes it challenging to operate a financially viable Section 8 portfolio without substantial additional support or subsidies.

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.