Location: Montgomery County, MS | Metro: Attala 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 | $740 |
| 1 Bedroom | $780 |
| 2 Bedrooms | $920 |
| 3 Bedrooms | $1,140 |
| 4 Bedrooms | $1,200 |
| 5 Bedrooms | $1,392 |
| 6 Bedrooms | $1,559 |
| 7 Bedrooms | $1,684 |
| 8 Bedrooms | $1,768 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,140 | $176,707 | 0.65% | D |
U.S. Census Bureau data (2024)
The analysis of the Section 8 cap-rate scenario for ZIP code 39745 reveals a distinct difference between using the Federal Market Rent (FMR) and the market rent figures. With an annualized 2BR FMR set at $900 for FY 2026, the gross yield can be calculated by dividing the annual rental income by the median home value. For FMR, this would be $900 multiplied by 12 months, equaling $10,800 annually. Dividing this by the median home value of $173,591 gives an implied gross yield of approximately 6.23%. This calculation assumes that the property is rented out at the FMR rate year-round.
Using the Census ACS reported market rent of $633 per month, the annual rental income becomes $7,596 ($633 x 12). The gross yield here is lower, coming in at around 4.38%. This figure is based on the assumption that the property is rented out at the market rate year-round.
The gross yield comparison between the two scenarios clearly shows that renting under the Section 8 program at the FMR rate provides a higher gross yield than renting at the market rate. However, the reality of the situation must also take into account the local rental market dynamics. In ZIP 39745, where the renter density stands at 28.1%, it is important to consider how competitive the rental market is. Given that the Days on Market (DOM) data is listed as N/A, it suggests that there might be limited information available about how quickly properties are being leased in this area, which could impact the likelihood of securing tenants at either the FMR or market rates.
In conclusion, while the Section 8 program offers a higher gross yield at 6.23% compared to the market rate's 4.38%, the decision to participate should be made after considering the local rental environment. The relatively low renter density implies that landlords may face challenges in finding tenants willing to pay the FMR rate, especially if the market rate is significantly lower. Therefore, the market rent scenario, despite offering a lower gross yield, might be more realistic for many landlords and small-portfolio investors in ZIP 39745.
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.