Location: Lauderdale County, MS | Metro: Kemper 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 | $1,070 |
| 1 Bedroom | $1,090 |
| 2 Bedrooms | $1,220 |
| 3 Bedrooms | $1,620 |
| 4 Bedrooms | $1,620 |
| 5 Bedrooms | $1,879 |
| 6 Bedrooms | $2,104 |
| 7 Bedrooms | $2,272 |
| 8 Bedrooms | $2,386 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,220 | $120,844 | 1.01% | B |
| 3BR | $1,620 | $160,307 | 1.01% | B |
U.S. Census Bureau data (2024)
The Section 8 thesis in ZIP code 39335, centered around Lauderdale, Mississippi, highlights a significant gap between the Fair Market Rent (FMR) and the actual market rent. The FMR for the metro area in fiscal year 2026 is set at $1,070, while the Census ACS reports the average market rent at $1,297. This discrepancy amounts to a difference of $227, or approximately 17.5%, between what voucher holders can pay and the open-market rental rates.
Given that the FMR is lower than the market rent, landlords and small-portfolio investors should be aware of the potential costs associated with housing voucher tenants below open-market rates. While the $1,070 FMR provides a guaranteed payment through the voucher program, the shortfall compared to the $1,297 market rate means that landlords will need to accept a lower rent per unit than they could potentially earn on the open market. This scenario transforms the investment into a yield play, where the focus shifts from maximizing immediate rental income to ensuring stable occupancy and consistent cash flow.
In the context of Lauderdale, MS, it's important to consider the broader economic landscape. With only 16.8% of residents being renters, the market is primarily driven by homeownership. The median home value stands at $145,540, indicating a relatively stable housing market. However, the median income of $85,804 suggests that a significant portion of the population might rely on assistance programs such as Section 8 to afford housing. Therefore, the decision to participate in the Section 8 program should be made with an understanding of the local demographics and the trade-offs involved in accepting lower rents in exchange for government-backed stability.
To summarize, the $227 gap between the FMR and market rent represents a 17.5% discount for voucher holders. For investors, this means choosing between higher immediate yields from market-rate rentals or the security and steady returns offered by Section 8 tenants, especially in a community where a considerable number of residents may require financial assistance to secure housing.
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.