Section 8 Fair Market Rent (FMR) for ZIP 39060 - 2027

FY 2027 Fair Market Rent Rates

The decision to invest in ZIP 39060 for Section 8 properties hinges on three key factors: the Fair Market Rent (FMR), the relationship between FMR and market rent, and the rental demand.

Step 1: Does the FMR of $1130 cover debt service?

• Yes: If the FMR of $1130 can cover the debt service on your investment property, proceed to the next step. This means the rental income generated from a Section 8 tenant will be sufficient to meet your mortgage obligations and other costs associated with owning the property.
• No: If the FMR of $1130 does not cover the debt service, then investing in ZIP 39060 is not advisable for Section 8 purposes. The rental income would fall short of covering your financial obligations, leading to potential losses.

Step 2: How does the market rent compare to the FMR?

• Above FMR: If the market rent exceeds the FMR of $1130, you might consider whether the premium justifies the risk of not securing Section 8 tenants. However, since the exact market rent figure is not available, this assessment remains incomplete.
• At or Below FMR: If the market rent is at or below the FMR, then focusing on Section 8 properties could be a strategic move as it aligns with the local rental pricing. This ensures that your investment is competitive and viable within the ZIP code's rental market.

Step 3: Is there enough rental demand?

• It Depends: Without specific percentages of renters and days on the market (DOM), it's challenging to make a definitive statement. However, if the percentage of renters and DOM indicate a healthy demand, such as a high percentage of renters and low DOM, then ZIP 39060 could be a good choice for Section 8 investments. Conversely, if the DOM is long and the percentage of renters is low, this suggests a weaker demand, which could impact your ability to find and retain tenants.

To summarize, if the FMR of $1130 covers your debt service and the market rent is at or below this figure, with strong rental demand evidenced by relevant metrics, then ZIP 39060 is a suitable location for Section 8 investments. Otherwise, the risks outweigh the benefits.

Data Sources: FMR data from HUD (2027).

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.