Location: Smith County, MS | Metro: Jackson, MS HUD Metro FMR Area
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 | $1,180 |
| 1 Bedroom | $1,180 |
| 2 Bedrooms | $1,380 |
| 3 Bedrooms | $1,640 |
| 4 Bedrooms | $1,810 |
| 5 Bedrooms | $2,100 |
| 6 Bedrooms | $2,352 |
| 7 Bedrooms | $2,540 |
| 8 Bedrooms | $2,667 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,380 | $175,535 | 0.79% | D |
| 3BR | $1,640 | $263,509 | 0.62% | D |
| 4BR | $1,810 | $375,201 | 0.48% | F |
| 5BR | $2,100 | $506,871 | 0.41% | F |
U.S. Census Bureau data (2024)
The Section 8 housing market in ZIP code 39042, which encompasses Brandon, MS, and parts of Rankin and Smith Counties, offers a clear comparison between government-subsidized rental rates and the actual market. The Fair Market Rent (FMR) set by HUD for this area in fiscal year 2024 is $1,200. This figure is significantly below the market rent, as indicated by the Zillow Observed Rent Index (ZORI), which stands at $1,721. Given these numbers, voucher tenants would only cashflow at the FMR level with premium units that are priced lower than the average market rate.
To further analyze the investment potential, consider the median home value in the region, which is $282,143. Using this data point, we can calculate the rent-to-price ratio. The ratio, derived from dividing the ZORI by the median home value, is approximately 0.61%. This suggests that the rental income generated from a property in this area represents a modest percentage of its total value, making it a less attractive option purely from a cashflow perspective.
However, the dynamics of the local real estate market provide additional context. With a median Days on Market (DOM) of 29 days, properties are moving quickly, indicating a strong demand for housing. Additionally, the low price-cut share of 0.2% shows that sellers are generally able to achieve their asking prices without significant concessions. These factors suggest a stable and slightly appreciating market, where maintaining property values and ensuring steady occupancy are likely to be key concerns for investors.
The strongest angle for Section 8 investors in ZIP 39042 is stability. While cashflow may be limited due to the disparity between HUD's FMR and market rents, the quick turnover and minimal need for price reductions indicate a reliable tenant base and consistent property performance.
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.