Section 8 Fair Market Rent (FMR) for ZIP 39401 - 2027

Investment Score for ZIP 39401

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	$890
1 Bedroom	$1,080
2 Bedrooms	$1,270
3 Bedrooms	$1,620
4 Bedrooms	$1,680
5 Bedrooms	$1,949
6 Bedrooms	$2,183
7 Bedrooms	$2,358
8 Bedrooms	$2,476

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
3BR	$1,620	$175,813	0.92%	C

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 39401, Mississippi #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 39401 is set by HUD for the year 2026. The FMRs are as follows: - 0BR: $770 - 1BR: $860 - 2BR: $1030 (30.1% of median income) - 3BR: $1320 - 4BR: $1370 Given that there is no recent Zillow data available, we must rely on these figures to understand how they compare to actual rents. Typically, FMRs are set to reflect the average rent levels for decent housing units in the area. However, without current rental price data, it’s challenging to make a direct comparison. One key constraint for voucher holders is that the rent cannot exceed the FMR. For example, a voucher holder seeking a 2BR unit would be limited to paying up to $1030 per month. This can be a significant limitation if actual market rents exceed these amounts. #### Affordability & Renter Profile ZIP code 39401 has a population of 42,531, with 56.4% of residents being renters. This indicates a strong rental market, likely driven by the high percentage of renters. The occupancy rate stands at 87.4%, suggesting that the majority of housing units are occupied, but there is still some vacancy. The median household income in the area is $41,127. A 2BR unit priced at $1030 represents 30.1% of the median income, which is a reasonable figure according to HUD guidelines. However, this also implies that many residents might struggle to afford higher-end rentals or homes outside of the voucher program. Given the high renter percentage and moderate occupancy rate, it appears that the market is relatively balanced. There is demand for rental properties, but it is not so high that it drives rents significantly above the FMR. This suggests that while the market is tight, it is not overly competitive. #### Investor Angle From an investor perspective, the cash flow potential at FMR levels needs to be evaluated. The FMRs provide a ceiling for rents that voucher holders can pay. If an investor buys a property and rents it out at the FMR, they should expect to receive the following monthly rents: - 0BR: $770 - 1BR: $860 - 2BR: $1030 - 3BR: $1320 - 4BR: $1370 To determine if this is cash-flow positive, we need to consider the costs associated with owning and maintaining the property. These include mortgage payments, property taxes, insurance, maintenance, and utilities. Without specific cost data, we can infer that properties rented at FMR levels will likely break even or generate modest profits, depending on the exact location and condition of the property. Investment grade in this context refers to the quality and risk level of the investment. Given the high renter percentage and the fact that FMRs are set to ensure affordability, the investment grade for Section 8-focused properties in ZIP 39401 is likely to be stable. However, the lack of recent rental price data introduces some uncertainty regarding the actual market rents. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high percentage of renters and the FMRs, smaller units (0BR and 1BR) are likely to be in higher demand. These units are easier for voucher holders to afford, with 0BR units costing $770 and 1BR units costing $860. Investors should consider acquiring properties with multiple small units to maximize their potential for cash flow. 2. **Target Affordable Housing**: Since 2BR units represent 30.1% of the median income, targeting properties that fall within this range can help attract tenants who are eligible for Section 8 vouchers. Properties priced at $1030 for a 2BR unit are more likely to be occupied and generate steady income. 3. **Monitor Local Rental Trends**: While the FMRs provide a guideline, local rental trends can vary. It would be prudent for investors to monitor any changes in rental prices and occupancy rates. This can be done through periodic checks of local real estate listings and reports from local real estate agents. #### Bottom Line Based on the provided data, ZIP code 39401 presents a moderately attractive market for Section 8-focused investors. The high renter percentage and stable occupancy rate indicate a solid demand for rental properties. However, the lack of recent rental price data means that there is some uncertainty about the actual market conditions. **Recommendation**: **Hold** Investors should hold onto existing Section 8-focused properties in this ZIP code due to the stable demand and reasonable FMRs. However, caution should be exercised when considering new investments until more recent rental price data becomes available. This will help ensure that the properties are indeed cash-flow positive and aligned with current market conditions.

Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.