Location: Yalobusha County, MS | Metro: Calhoun County, MS
Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)
| Unit Size | Monthly FMR |
|---|---|
| Studio | $950 |
| 1 Bedroom | $950 |
| 2 Bedrooms | $1,120 |
| 3 Bedrooms | $1,390 |
| 4 Bedrooms | $1,490 |
| 5 Bedrooms | $1,728 |
| 6 Bedrooms | $1,935 |
| 7 Bedrooms | $2,090 |
| 8 Bedrooms | $2,195 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,120 | $148,570 | 0.75% | D |
| 3BR | $1,390 | $193,976 | 0.72% | D |
| 4BR | $1,490 | $253,958 | 0.59% | F |
U.S. Census Bureau data (2024)
The economics of Section 8 housing in ZIP code 38965, which encompasses Water Valley, Mississippi, within Yalobusha County, can be dissected into several key components. The SAFMR (Small Area Fair Market Rent) for a two-bedroom apartment in this ZIP code for fiscal year 2026 is set at $1,170. This figure represents the maximum amount that the government will pay landlords on behalf of eligible tenants under the Housing Choice Voucher program.
In contrast, the local market rent for a similar unit, as indicated by ZORI (Zillow Observed Rental Index), stands at $1,500. This discrepancy highlights the financial dynamics landlords face when participating in the Section 8 program. To understand what a landlord can expect in terms of actual payments, it's essential to consider the tenant portion of the rent and utility allowances.
Tenants enrolled in Section 8 are typically required to contribute 30% of their adjusted income toward the rent. If a tenant's adjusted income is $1,000, their monthly contribution would be $300. However, if their contribution is less than 30% of the SAFMR, the difference is absorbed by the government, ensuring the landlord receives the full SAFMR amount. For instance, if the tenant's contribution is only $200, the government would make up the difference to ensure the landlord receives the full $1,170.
Beyond the base rent, utility allowances are also factored into the overall payment structure. These allowances vary but are generally designed to cover reasonable utility costs. In ZIP 38965, the utility allowance is not explicitly stated; however, it's crucial for landlords to know that these allowances are additional to the SAFMR and are intended to help offset the cost of utilities for tenants.
To summarize, in ZIP 38965, landlords participating in the Section 8 program for a two-bedroom apartment can expect to receive a total of $1,170 per month, including any utility allowances. Given that the local market rent is $1,500, there is a reimbursement gap of $330 between the market rate and the SAFMR. This gap must be accounted for by the landlord, either through accepting a lower rent or finding ways to reduce operating costs.
Landlords should also be aware that the SAFMR is set specifically for this ZIP code, meaning it reflects the rental market conditions unique to Water Valley, Mississippi. This localized approach aims to ensure that the rent subsidies are appropriate for the area's economic reality.
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.