Section 8 Fair Market Rent (FMR) for ZIP 40334 - 2027

FY 2027 Fair Market Rent Rates

The analysis of the Section 8 cap-rate scenario for ZIP code 40334 reveals some critical insights for landlords and small-portfolio investors. The Federal Market Rent (FMR) for a two-bedroom unit in the metro area for fiscal year 2026 is set at $900 per month. This figure is crucial for understanding the potential rental income under the Section 8 program.

To derive the gross yield, we need to consider the annualized rental income. For a two-bedroom unit, this would be $10,800 annually ($900 x 12 months). However, the median home value in ZIP 40334 is not available, which complicates the direct calculation of a cap rate. A cap rate is typically calculated by dividing the net operating income (NOI) by the property's value. Without a median home value, we cannot compute an exact cap rate.

In the absence of a median home value, let's assume a hypothetical value to illustrate the gross yield. If the median home value were hypothetically $200,000, the gross yield would be 5.4% ($10,800 / $200,000 * 100). This is purely illustrative; actual yields will vary based on the true median home value. The lack of market rent data further hinders a precise comparison between Section 8 rents and market rents, suggesting that market conditions must be closely monitored.

Given the N/A% renter density and the N/A-day Days on Market (DOM), it's challenging to determine which scenario is more realistic. However, the high renter density generally implies a robust demand for rentals, which could favor higher market rents. Conversely, a long DOM might suggest a sluggish market, where Section 8 rents could be more competitive.

To conclude, while the exact cap rate cannot be determined without the median home value and market rent data, the gross yield from Section 8 can be estimated. Assuming a median home value of $200,000, the gross yield would be 5.4%. This provides a baseline for investors to compare against their own calculations of market rent yields. It's essential to note that these figures should be used as a starting point for deeper analysis, considering individual property costs, maintenance expenses, and local market dynamics.

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.