Section 8 Fair Market Rent (FMR) for ZIP 32137 - 2027

Investment Score for ZIP 32137

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	$1,420
1 Bedroom	$1,470
2 Bedrooms	$1,880
3 Bedrooms	$2,520
4 Bedrooms	$2,760
5 Bedrooms	$3,202
6 Bedrooms	$3,586
7 Bedrooms	$3,873
8 Bedrooms	$4,067

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
1BR	$1,470	$248,142	0.59%	F
2BR	$1,880	$267,767	0.7%	D
3BR	$2,520	$371,149	0.68%	D
4BR	$2,760	$433,328	0.64%	D
5BR	$3,202	$619,845	0.52%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 32137 (Palm Coast, FL) #### Section 8 Voucher Dynamics In ZIP code 32137, the Fair Market Rent (FMR) for a two-bedroom apartment is set at $1920 per month. This figure represents 27.5% of the median household income in the area, which stands at $83,923. The FMR is designed to reflect the average rent for a modest apartment in the local market, but it often falls short of actual rental costs. For instance, the Zillow median price for a two-bedroom home in Palm Coast is $265,043, which translates to a monthly mortgage payment that would be significantly higher than the FMR if financed through typical lending practices. Given the high price-to-FMR ratio of 11.5x, it suggests that actual rents in the area could be much higher than the FMR, creating a significant constraint for Section 8 voucher holders. They might struggle to find suitable housing options within their budget, particularly for larger units like three or four bedrooms, where the FMRs are $2620 and $2970 respectively. #### Affordability & Renter Profile The renter population in ZIP code 32137 accounts for 13.6% of the total population, indicating a relatively small percentage of residents who rely on rental housing. With an occupancy rate of 82.5%, the market appears to be moderately occupied, suggesting neither a tight nor an oversupplied rental market. However, the affordability challenge for renters is substantial due to the high price-to-FMR ratio. This means that even though there might be enough units available, the cost of renting those units could be prohibitive for many low-income families who depend on Section 8 vouchers. These families typically have incomes below 50% of the area median income, making it difficult for them to afford the actual rents that are likely above the FMR levels. #### Investor Angle From an investor perspective, the ZIP code 32137 presents a mixed picture when considering the potential for cash flow positive investments at the FMR levels. While the FMRs provide a baseline for rental pricing, the actual rents are likely to be much higher given the price-to-FMR ratio. For example, a two-bedroom unit priced at $1920 per month under FMR guidelines would generate a lower return compared to the market rate. However, if an investor can secure a property at a price point closer to the FMR, they might still achieve positive cash flow, especially if they can leverage economies of scale or manage properties efficiently. The investment grade for this ZIP code would be considered moderate. The relatively low renter population and occupancy rate suggest that there is some risk associated with relying solely on Section 8 tenants. Additionally, the high price-to-FMR ratio indicates that there might be limited opportunities to purchase properties at prices that align with FMR guidelines, potentially leading to lower returns on investment. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors should focus on smaller units such as one-bedroom apartments. The FMR for a one-bedroom unit is $1520, which is still a significant portion of the median income at 18.1%. Smaller units are generally easier to fill and maintain, and they may offer better cash flow opportunities if purchased at a price point closer to the FMR. 2. **Consider Mixed-Income Developments**: To mitigate the risk of relying solely on Section 8 tenants, investors might consider developing mixed-income properties. By offering a mix of units that cater to both Section 8 voucher holders and market-rate renters, investors can diversify their tenant base and ensure a more stable cash flow. This approach also helps address the affordability gap by providing a range of rental options. 3. **Strategic Location Selection**: Within ZIP code 32137, investors should carefully select locations that are more attractive to Section 8 tenants. Areas near public transportation, schools, and other essential services tend to be more desirable and may help in securing tenants faster. Additionally, proximity to employment centers can be beneficial for attracting working families who are more likely to maintain stable tenancy. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 32137 is to **Hold**. While there are opportunities to invest in smaller units and develop mixed-income properties, the high price-to-FMR ratio and the relatively low renter population pose significant challenges. Investors should proceed with caution and consider diversifying their portfolio to include a mix of Section 8 and market-rate units to balance risk and reward. The market dynamics suggest that achieving positive cash flow will require strategic property selection and efficient management practices.

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.