Section 8 Fair Market Rent (FMR) for ZIP 38654 - 2027

Investment Score for ZIP 38654

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	$1,510
1 Bedroom	$1,640
2 Bedrooms	$1,790
3 Bedrooms	$2,360
4 Bedrooms	$2,730
5 Bedrooms	$3,167
6 Bedrooms	$3,547
7 Bedrooms	$3,831
8 Bedrooms	$4,023

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	$1,790	$202,805	0.88%	C
3BR	$2,360	$274,392	0.86%	C
4BR	$2,730	$378,821	0.72%	D
5BR	$3,167	$462,281	0.69%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 38654 (Olive Branch, MS) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 38654 in 2026 is set at $1690 for a two-bedroom unit, which represents approximately 19.7% of the median household income in the area. This means that a family earning the median income would spend nearly one-fifth of their earnings on rent for a two-bedroom apartment. However, the actual rental prices in Olive Branch are significantly higher, with the Zillow median price for a two-bedroom home being $204,357. The price-to-FMR ratio of 10.1x indicates that the actual cost of renting a property far exceeds the FMR, making it challenging for voucher holders to find affordable housing. For example, a landlord who charges $204,357 for a two-bedroom unit would be charging over ten times the FMR, which is not covered by the voucher. Consequently, voucher holders are constrained to finding properties within the FMR range, which is likely limited given the high actual rental prices. #### Affordability & Renter Profile Olive Branch has a relatively low percentage of renters at 14.9%, suggesting that the majority of residents own their homes. The occupancy rate of 96.6% indicates that there is little vacancy in the housing stock, implying a tight rental market. Given the high median household income of $103,092, the typical renter in this area is likely to be financially stable and able to afford higher rents. However, the 14.9% of renters who do occupy the market are faced with significant challenges due to the high price-to-FMR ratio. The median income is much higher than the FMR, but the actual rental costs are still prohibitive for many voucher holders. Therefore, while the overall market is tight, it remains challenging for those relying on Section 8 vouchers to secure housing. #### Investor Angle From an investor perspective, the ZIP code 38654 offers mixed opportunities. While the median household income is robust, the high actual rental prices suggest that the market is not particularly favorable for cash flow if investors aim to charge only FMR rates. For instance, a two-bedroom unit at the FMR of $1690 would generate less revenue compared to the actual median rental price of $204,357. This discrepancy makes it difficult for investors to achieve positive cash flow solely based on FMR rates. Furthermore, the investment grade in this area would be considered moderate due to the tight rental market and the high price-to-FMR ratio. Investors would need to carefully consider their pricing strategy and ensure they can attract tenants willing to pay the higher rates. #### Specific Actionable Insights 1. **Targeting Affordable Housing**: Investors should focus on developing or acquiring properties that cater specifically to the needs of Section 8 voucher holders. By setting rents closer to the FMR, they can attract a steady stream of tenants who are guaranteed government assistance. For a two-bedroom unit, setting the rent at $1690 would align with the FMR and make the property more accessible to voucher holders. 2. **Diversifying Tenant Base**: Given the high actual rental prices, investors could also diversify their tenant base by targeting both voucher holders and other renters. This approach would involve offering a mix of units at different price points, including some at or near FMR to accommodate voucher holders, while others could be priced higher to maximize revenue and achieve positive cash flow. #### Bottom Line For Section 8-focused investors, the ZIP code 38654 presents a challenging environment due to the high actual rental prices and the tight market conditions. The recommendation for this area is to **Skip** investing purely based on Section 8 vouchers unless the investor can develop or acquire properties at a lower cost. The high price-to-FMR ratio suggests that achieving positive cash flow solely through FMR rates is unlikely. Investors should consider other markets where the actual rental prices are closer to the FMR, or they should explore strategies that include a broader tenant base beyond just voucher holders.

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.