Section 8 Fair Market Rent (FMR) for ZIP 48126 - 2027

Investment Score for ZIP 48126

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	$1,060
1 Bedroom	$1,180
2 Bedrooms	$1,480
3 Bedrooms	$1,800
4 Bedrooms	$1,960
5 Bedrooms	$2,274
6 Bedrooms	$2,547
7 Bedrooms	$2,751
8 Bedrooms	$2,889

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	$1,480	$176,972	0.84%	C
3BR	$1,800	$235,175	0.77%	D
4BR	$1,960	$278,647	0.7%	D
5BR	$2,274	$295,067	0.77%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 48126 (Dearborn, MI) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 48126 is set by HUD for 2026. For a two-bedroom unit, the FMR is $1380, which represents 39.3% of the median household income of $42,140. This suggests that the rent is relatively affordable for the average resident in the area. However, comparing this to actual rents, the Zillow median price for a two-bedroom home is $172,961, indicating a significant disparity between the cost of ownership and rental rates. The price-to-FMR ratio of 10.4x highlights the high cost of homeownership relative to renting, making it more likely that residents will opt for rentals rather than purchasing homes. Given the FMR constraints, voucher holders in Dearborn face limitations on the types of units they can afford. A three-bedroom unit costs $1690, while a four-bedroom unit costs $1830. These higher rents may restrict families who need larger spaces from finding suitable housing within their budget. Additionally, the occupancy rate of 90.7% indicates a strong demand for housing, which could further strain the ability of voucher holders to find available units. #### Affordability & Renter Profile With a population of 51,997 and 43.4% of households being renters, the market in Dearborn is heavily reliant on rental properties. The median household income of $42,140 suggests that many residents are low-income earners, making them potential candidates for government assistance programs like Section 8 vouchers. Given that 39.3% of the median income goes towards a two-bedroom unit, the market appears to be quite tight, especially for those relying on vouchers. The high occupancy rate also supports the notion that there is limited excess capacity in the rental market, leading to competition among tenants. #### Investor Angle From an investor perspective, the ZIP code 48126 presents both opportunities and challenges. The FMR for a two-bedroom unit is $1380, which is significantly lower than the median home value of $172,961. This means that rental properties can potentially generate positive cash flow if managed effectively. However, the high price-to-FMR ratio of 10.4x implies that purchasing properties in this area would require a substantial upfront investment, which might not be immediately recouped through rental income alone. In terms of investment grade, Dearborn’s market dynamics suggest a moderate risk profile. The strong demand for rental properties and the high occupancy rate indicate a stable market, but the reliance on government assistance programs like Section 8 could introduce regulatory complexities and potential delays in lease payments. Investors should carefully consider these factors before committing capital to the area. #### Specific Actionable Insights 1. **Focus on Two-Bedroom Units**: Given the FMR for a two-bedroom unit is $1380, which is 39.3% of the median income, this size of unit is most likely to attract Section 8 voucher holders. Investing in two-bedroom properties could provide a steady stream of rental income, especially since the occupancy rate is high. 2. **Consider Larger Units for Non-Voucher Tenants**: While the FMR for three and four-bedroom units is higher ($1690 and $1830 respectively), these units may still be attractive to non-voucher tenants who have higher incomes. Diversifying the portfolio to include larger units could help balance the risk associated with voucher-dependent tenants. 3. **Monitor Local Rental Prices**: The Zillow median price for a two-bedroom home is $172,961, which is much higher than the FMR of $1380. Investors should keep a close eye on local rental prices to ensure that they remain competitive and within the FMR guidelines. This will help maintain occupancy levels and avoid potential vacancies. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 48126 (Dearborn, MI) is to **Buy**. The strong demand for rental properties, high occupancy rate, and the affordability of two-bedroom units make this a promising market. However, investors should be prepared to navigate the complexities of government assistance programs and ensure that their properties are well-managed to comply with FMR regulations. Diversifying into larger units could also provide additional stability and potential for higher returns.

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.