Section 8 Fair Market Rent (FMR) for ZIP 48235 - 2027

Investment Score for ZIP 48235

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	$980
1 Bedroom	$1,100
2 Bedrooms	$1,370
3 Bedrooms	$1,670
4 Bedrooms	$1,810
5 Bedrooms	$2,100
6 Bedrooms	$2,352
7 Bedrooms	$2,540
8 Bedrooms	$2,667

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	$1,370	$68,284	2.01%	A+
3BR	$1,670	$108,667	1.54%	A+
4BR	$1,810	$141,219	1.28%	A

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 48235 (Detroit, MI) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 48235 is set by HUD to ensure that low-income households can afford housing. For 2026, the FMRs are as follows: - 0BR: $950 - 1BR: $1060 - 2BR: $1330 - 3BR: $1620 - 4BR: $1760 To understand how these figures compare to actual rents, we need to consider the price-to-FMR ratio. The Zillow median price for a 2BR unit in this area is $65,175, which translates to a monthly rent of approximately $543 based on typical rental yields. However, the price-to-FMR ratio is 4.1x, indicating that actual rents are significantly higher than the FMR. This means that a 2BR unit with an FMR of $1330 would likely cost around $5463 per month if it were priced at the Zillow median price level. This disparity presents significant constraints for voucher holders. They must find units that do not exceed the FMR, which can be challenging given the high actual rents in the area. Additionally, landlords may be hesitant to accept vouchers due to the lower rent compared to market rates. #### Affordability & Renter Profile ZIP code 48235 has a population of 45,600, with 46.5% of residents being renters. The occupancy rate is 87.6%, suggesting a relatively tight market where most available units are occupied. The median household income is $39,265, and the FMR for a 2BR unit is 40.6% of this income. This indicates that a substantial portion of the population could struggle to afford housing without assistance, especially considering that the actual rents are much higher than the FMR. Given the high percentage of renters and the tight market conditions, there is a strong demand for affordable housing. However, the high actual rents suggest that many units are out of reach for low-income households, even with Section 8 vouchers. #### Investor Angle From an investor perspective, the key question is whether properties can generate positive cash flow at the FMR. Given the Zillow median price of $65,175 for a 2BR unit, the expected monthly rent based on typical rental yields would be around $543. However, the actual rent for a 2BR unit is expected to be closer to $5463, which is 4.1x the FMR. If an investor purchases a property at the Zillow median price and rents it out at the FMR, they would likely face negative cash flow. The FMR of $1330 for a 2BR unit is significantly below the market rent, making it difficult to cover mortgage payments, maintenance costs, and other expenses. In terms of investment grade, the high price-to-FMR ratio suggests that this ZIP code is not favorable for investors focusing solely on Section 8 vouchers. The risk of negative cash flow and the potential difficulty in finding tenants willing to pay market rates but also accepting vouchers makes this a challenging investment environment. #### Specific Actionable Insights 1. **Focus on Lower-Rent Units**: Investors should focus on acquiring 0BR and 1BR units, which have FMRs of $950 and $1060 respectively. These units are more likely to be rented out at or near the FMR, providing a better chance for positive cash flow. 2. **Consider Renovation Projects**: If purchasing a property at the Zillow median price is too risky, investors might consider buying older properties at a discount and renovating them. This approach could potentially increase the rental value while still keeping it within the FMR range, thus attracting voucher holders. 3. **Explore Non-Section 8 Rental Opportunities**: Given the high actual rents, there is a significant opportunity to rent units to non-voucher holders who can afford higher rates. Investors should assess the local market to determine if there is sufficient demand for market-rate rentals. #### Bottom Line For investors focusing specifically on Section 8 vouchers, the recommendation for ZIP code 48235 is to **skip** this market. The high price-to-FMR ratio and the tight market conditions make it difficult to achieve positive cash flow. Instead, investors should look for areas with a lower price-to-FMR ratio or explore opportunities outside of the Section 8 program where they can leverage higher market rents.

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.