Section 8 Fair Market Rent (FMR) for ZIP 32304 - 2027

Investment Score for ZIP 32304

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	$1,170
1 Bedroom	$1,250
2 Bedrooms	$1,410
3 Bedrooms	$1,730
4 Bedrooms	$1,850
5 Bedrooms	$2,146
6 Bedrooms	$2,404
7 Bedrooms	$2,596
8 Bedrooms	$2,726

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	$1,250	$102,967	1.21%	A
2BR	$1,410	$139,983	1.01%	B
3BR	$1,730	$184,195	0.94%	C
4BR	$1,850	$247,242	0.75%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 32304 (Tallahassee, FL) #### Section 8 Voucher Dynamics In ZIP code 32304, the Fair Market Rent (FMR) for a two-bedroom unit is set at $1360 per month. This figure represents 50.5% of the median household income in the area, which is $32,348. The FMRs for other bedroom sizes are as follows: $1100 for a zero-bedroom unit, $1210 for a one-bedroom unit, $1680 for a three-bedroom unit, and $1800 for a four-bedroom unit. These figures are critical for understanding how Section 8 vouchers work in this market. Voucher holders are constrained by the FMR limits, meaning they can only afford units up to these price points. However, if actual rents exceed these amounts, voucher holders may struggle to find suitable housing. For instance, a voucher holder seeking a two-bedroom unit would be limited to paying $1360, but if the actual rent exceeds this amount, they would have to pay the difference out-of-pocket, which could be challenging given their median income. #### Affordability & Renter Profile ZIP code 32304 has a high renter population of 86.5%, indicating that it is primarily a rental market. The occupancy rate stands at 81.3%, suggesting that there is a relatively good balance between supply and demand. However, the high percentage of renters and the fact that many are likely to rely on Section 8 vouchers due to the low median household income ($32,348) imply that affordability is a significant concern. The median household income being relatively low means that many residents are likely to be in lower-income brackets, making them eligible for Section 8 assistance. With 86.5% of the population renting, the market is highly dependent on affordable housing options. Given that the FMR for a two-bedroom unit is $1360, which is 50.5% of the median income, the market is tight for those relying solely on their income without additional assistance. #### Investor Angle From an investor perspective, the key metric is whether properties can generate positive cash flow at the FMR levels. The Zillow median price for a two-bedroom unit is $138,530, and the price-to-FMR ratio is 8.5x. This ratio indicates that the purchase price of a property is significantly higher compared to its monthly rental income. To illustrate: - A two-bedroom unit priced at $138,530 would need to generate approximately $16,274.70 annually to break even at the FMR of $1360 per month. - Considering typical expenses such as mortgage payments, property taxes, insurance, maintenance, and management fees, it is unlikely that an investor would achieve positive cash flow at this FMR level. Additionally, the high price-to-FMR ratio suggests that the market is overvalued relative to rental income potential, which could pose risks for investors looking to buy properties in this ZIP code. #### Specific Actionable Insights 1. **Focus on Units Below FMR**: Investors should consider acquiring units that are priced below the FMR to ensure positive cash flow. For example, a two-bedroom unit rented at $1200 instead of $1360 would provide a better margin for expenses and profit. 2. **Consider Multi-Family Properties**: Given the high renter population and the tight market, multi-family properties might offer a better opportunity for positive cash flow. These properties can spread costs across multiple units, potentially increasing overall profitability. 3. **Explore Renovation Opportunities**: Some older or less desirable units may be available at lower prices. Renovating these units to meet modern standards while keeping the rent within FMR limits could create a niche market and improve cash flow. #### Bottom Line For Section 8-focused investors, the recommendation is to **Skip** this ZIP code. The high price-to-FMR ratio and the tight market conditions make it difficult to achieve positive cash flow. Additionally, the high renter population and low median income suggest that competition for affordable units is fierce, and finding tenants who can utilize Section 8 vouchers effectively may be challenging. Instead, investors should look for areas where the price-to-FMR ratio is lower and where there is a better balance between supply and demand for affordable housing.

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.