Section 8 Fair Market Rent (FMR) for ZIP 32935 - 2027

Investment Score for ZIP 32935

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	$1,360
1 Bedroom	$1,560
2 Bedrooms	$1,820
3 Bedrooms	$2,440
4 Bedrooms	$2,770
5 Bedrooms	$3,213
6 Bedrooms	$3,599
7 Bedrooms	$3,887
8 Bedrooms	$4,081

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	$1,560	$112,170	1.39%	A
2BR	$1,820	$189,548	0.96%	C
3BR	$2,440	$281,600	0.87%	C
4BR	$2,770	$331,349	0.84%	C
5BR	$3,213	$461,130	0.7%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 32935 (Melbourne, FL) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 32935 is set by HUD for 2026. For a two-bedroom unit, the FMR is $1770. This amount represents 32.9% of the median household income in the area, which stands at $64,588. The FMR is intended to reflect the average rent that voucher holders can afford, but it is important to understand how this compares to actual rental rates. In reality, the actual rents in Melbourne, FL, are likely higher than the FMR. The Zillow median price for a two-bedroom home is $189,097, which suggests that the rental market could be similarly inflated. Given the high price-to-FMR ratio of 8.9x, it is clear that many units in the market exceed the FMR, making it challenging for voucher holders to find affordable housing. This constraint means that landlords who want to participate in the Section 8 program must keep their rents below the FMR, which could limit their profitability compared to the broader market. #### Affordability & Renter Profile The population of ZIP 32935 is 41,965, with 40.3% being renters. This indicates a significant portion of the community relies on rental housing. The occupancy rate of 91.3% suggests that the market is relatively tight, with most available units being occupied. This tightness can drive up rental prices, further exacerbating the affordability issue for low-income renters. Given that 32.9% of the median household income is allocated towards a two-bedroom unit, it is evident that many residents are struggling to meet their housing costs. The high price-to-FMR ratio also implies that the market is not oversupplied; rather, it is competitive and potentially overpriced relative to what voucher holders can afford. This makes it difficult for those with limited financial resources to secure housing without assistance. #### Investor Angle From an investor perspective, the key question is whether participating in the Section 8 program can yield positive cash flow. With the FMR for a two-bedroom unit at $1770, investors need to evaluate if they can cover their expenses and generate profit at these rates. To determine if this ZIP code is cash-flow positive, we would need to consider factors such as property taxes, insurance, maintenance costs, and mortgage payments (if applicable). However, based on the provided data, the FMR is significantly lower than the median rental price implied by the Zillow median home price. If we assume that rental prices are similar to home prices, then the actual rental market is much higher than the FMR. Given the 8.9x price-to-FMR ratio, it is likely that many units in the market are priced above the FMR, which could make it challenging for investors to find properties that offer both positive cash flow and participation in the Section 8 program. The investment grade for this ZIP code would be considered moderate to low due to the tight market and the high cost of living relative to the FMR. #### Specific Actionable Insights 1. **Target Lower-Rent Properties**: Investors should focus on acquiring properties that are priced close to or slightly below the FMR. For example, targeting one-bedroom units priced at $1530 or less could provide a better chance of attracting Section 8 tenants while still maintaining positive cash flow. 2. **Consider Multi-Family Units**: Given the high demand for rental housing and the tight market, multi-family units could be more attractive. A three-bedroom unit priced at $2410 might appeal to families looking for larger spaces, and this could be more profitable than single-family homes. 3. **Evaluate Location-Specific Factors**: While the overall market appears to be tight, certain neighborhoods within ZIP 32935 might have more affordable rents. Conducting a neighborhood-by-neighborhood analysis could reveal pockets where rents are closer to the FMR, providing better opportunities for Section 8-focused investments. #### Bottom Line Based on the analysis, the recommendation for Section 8-focused investors in ZIP code 32935 is to **Hold**. The high price-to-FMR ratio and the tight market conditions suggest that finding properties that offer both positive cash flow and participation in the Section 8 program will be challenging. Investors should carefully evaluate potential properties and consider focusing on lower-rent units or multi-family properties to maximize their chances of success. However, given the constraints, it may be prudent to wait for market conditions to improve before making new acquisitions.

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.