Section 8 Fair Market Rent (FMR) for ZIP 32907 - 2027

Investment Score for ZIP 32907

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	$1,540
1 Bedroom	$1,770
2 Bedrooms	$2,060
3 Bedrooms	$2,760
4 Bedrooms	$3,140
5 Bedrooms	$3,642
6 Bedrooms	$4,079
7 Bedrooms	$4,405
8 Bedrooms	$4,625

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	$2,060	$217,165	0.95%	C
3BR	$2,760	$285,178	0.97%	C
4BR	$3,140	$348,683	0.9%	C
5BR	$3,642	$424,526	0.86%	C

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 32907 (Palm Bay, FL) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 32907, as set by HUD for 2026, is $1930 for a two-bedroom unit. This figure represents 30.8% of the median household income in Palm Bay, which stands at $75,311. However, the actual rental market in Palm Bay is significantly higher than the FMR. According to Zillow, the median price for a two-bedroom home is $215,229, which translates to a monthly rent of approximately $1793.66 if we assume a 5% annual yield on investment properties. The price-to-FMR ratio is 9.3x, indicating that the median home value is nearly nine times the FMR for a similar-sized rental unit. This discrepancy means that Section 8 voucher holders face significant constraints when trying to find housing that fits their budget. For instance, a voucher holder would have difficulty renting a two-bedroom unit at the Zillow median price because it exceeds the FMR limit. They might need to look for smaller units or negotiate with landlords to accept the lower voucher amount, which could be challenging given the high demand and limited supply in the area. #### Affordability & Renter Profile In Palm Bay, only 13.3% of the population are renters, suggesting that the majority of residents own their homes. With a median household income of $75,311, the typical renter profile likely includes families or individuals who earn below the median income but still require affordable housing options. The occupancy rate of 94.1% indicates that the rental market is relatively tight, with most available units being occupied. This suggests that there is little oversupply in the rental market, making it difficult for voucher holders to find suitable accommodation without facing significant competition from other potential tenants. Given the high price-to-FMR ratio, the rental market is not particularly affordable for those relying solely on Section 8 vouchers. Landlords may be less inclined to accept vouchers due to the higher costs associated with maintaining rental properties compared to the FMR limits. Consequently, the market dynamics create a challenging environment for low-income renters seeking housing through Section 8 programs. #### Investor Angle From an investor's perspective, the ZIP code 32907 offers a mixed outlook. The FMR for a two-bedroom unit is $1930, which is lower than the Zillow median price of $215,229. If we consider the Zillow median price and assume a 5% annual yield, the expected monthly rental income would be around $1793.66. This is slightly below the FMR but still above the typical rent that voucher holders can afford. To determine whether this ZIP code is cash-flow positive at FMR, we must consider the cost of acquisition and ongoing expenses. Assuming a purchase price of $215,229 and a 5% annual yield, the monthly rental income would be $1793.66. However, investors need to factor in property taxes, insurance, maintenance, and other costs. Property taxes in Brevard County average around 1.2%, which would amount to approximately $2583 annually or $215.25 per month. Insurance costs vary but can be estimated at around $150 per month. Maintenance and other miscellaneous costs could add another $200 per month. Thus, total monthly expenses could be around $565.25, leaving a net cash flow of about $1228.41 if rented at the Zillow median price. However, if the property is rented to a Section 8 voucher holder at the FMR of $1930, the net cash flow would be $1364.75, which is more favorable. Therefore, the ZIP code 32907 appears to be cash-flow positive at FMR, especially considering the tight rental market and the potential for higher rents. #### Investment Grade The investment grade for ZIP code 32907 can be assessed based on several factors, including the demand for rental properties, the affordability of housing, and the overall economic stability of the area. Given the high occupancy rate and the relatively tight rental market, there is strong demand for rental properties. However, the high price-to-FMR ratio suggests that the market is not particularly affordable for low-income renters, which could impact the number of Section 8 voucher holders able to secure housing. Despite these challenges, the strong demand and the fact that the FMR is still above the typical rent that voucher holders can afford indicate that this ZIP code has a solid investment grade. Investors should be prepared to navigate the complexities of working with Section 8 vouchers and potentially dealing with lower rents than market rates. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors should focus on acquiring one-bedroom or studio units, where the FMR is $1670 and $1430 respectively. These units are more likely to align with the voucher limits and offer better opportunities for cash flow. 2. **Negotiate with Landlords**: Since the rental market is tight, investors should consider negotiating with landlords to accept Section 8 vouchers. Offering incentives such as a guaranteed tenant or covering some of the upfront costs could make the deal more attractive to landlords. 3. **Consider Long-Term Rental Agreements**: To mitigate the risk of lower rents, investors could explore long-term rental agreements with Section 8 voucher holders. This would provide a stable source of income over a longer period, reducing the volatility associated with short-term leases. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 32907 is to **Buy**. Despite the challenges posed by the high price-to-FMR ratio, the strong demand for rental properties and the potential for cash flow at FMR levels make this ZIP code a viable investment opportunity. However, investors should carefully evaluate the specific unit sizes and negotiate effectively with landlords to ensure they can meet the needs of voucher holders while maintaining profitability.

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.