Section 8 Fair Market Rent (FMR) for ZIP 48125 - 2027

Location: Detroit-Warren-Livonia, MI | Metro: Detroit-Warren-Livonia, MI HUD Metro FMR Area

Investment Score for ZIP 48125

Monthly Rent (2BR)

$1,620

Median Price (2BR)

$131,901

1% Rule

1.23%

Annual Yield

14.74%

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	$1,160
1 Bedroom	$1,300
2 Bedrooms	$1,620
3 Bedrooms	$1,970
4 Bedrooms	$2,140
5 Bedrooms	$2,482
6 Bedrooms	$2,780
7 Bedrooms	$3,002
8 Bedrooms	$3,152

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
2BR	$1,620	$131,901	1.23%	A
3BR	$1,970	$171,932	1.15%	B
4BR	$2,140	$192,440	1.11%	B
5BR	$2,482	$243,007	1.02%	B

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

Population

22,125

Median Household Income

$60,195

Housing Units

8,941

Renter Percentage

32.1%

Occupancy Rate

94.3%

Renter Occupied

2,703

The Section 8 thesis in ZIP code 48125, located in Dearborn Heights, MI, is centered around the disparity between the Fair Market Rent (FMR) and the actual market rent. The FMR for ZIP 48125 in fiscal year 2024 is set at $1460, while the market rent, as measured by the Zillow Rent Index (ZORI), stands at $1540. This creates a gap of $80, representing a 5.48% difference between the two figures.

In Dearborn Heights, where 32.1% of residents are renters, the median home value is $162,781 and the median income is $60,195. These economic conditions suggest that many renters rely heavily on assistance programs such as Section 8 vouchers to afford housing. Given that the FMR is lower than the market rent, landlords and small-portfolio investors should be aware of the potential financial implications of accepting Section 8 tenants.

The cost of housing voucher tenants below open-market rates can be summarized as follows:

Revenue Gap: Landlords will receive $80 less per month than what the market would typically bear, resulting in a direct impact on rental income.
Maintenance Costs: Voucher holders often require additional maintenance due to the condition of the properties they occupy. This can offset the revenue gap but requires careful property management.
Vacancy Rates: Section 8 properties may experience higher vacancy rates due to the strict regulations and longer application processes associated with the program.

Despite these challenges, the Section 8 program remains a significant source of stable rental income for landlords willing to navigate the requirements. With a steady stream of government-backed payments, landlords can mitigate risks related to non-payment and achieve a predictable cash flow, which is essential for long-term investment planning in a market with a high percentage of renters and relatively low median incomes.

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.