Section 8 Fair Market Rent (FMR) for ZIP 49023 - 2027

FY 2027 Fair Market Rent Rates

The economics of Section 8 housing in ZIP code 49023, located in Niles County, Michigan, involve understanding the SAFMR (Small Area Fair Market Rent) and how it interacts with the local rental market and tenant contributions.

The SAFMR for a two-bedroom apartment in ZIP 49023 for fiscal year 2024 is set at $1070. This rate is specifically determined for this ZIP code, reflecting the unique housing costs and economic conditions within the area.

A key component of the Section 8 program is the tenant's responsibility to pay a portion of the rent. Typically, this is around 30% of their income. If we assume an average tenant income of $1500 per month, which is common for the region, the tenant would contribute approximately $450 towards the rent. This leaves $620 to be covered by the voucher.

In addition to the base rent, Section 8 vouchers also provide utility allowances. For a two-bedroom apartment, the utility allowance can vary but often ranges between $150 to $200 per month. Assuming a middle-ground utility allowance of $175, this brings the total monthly reimbursement a landlord can expect from the voucher to $795 ($620 base rent + $175 utilities).

The SAFMR of $1070 represents the maximum amount that the government will reimburse for rent and utilities combined. Therefore, if the actual rent charged exceeds $1070, the landlord must cover the difference. Conversely, if the rent is below $1070, the landlord receives the full rent plus any remaining utility allowance, up to the $1070 limit.

Given the local market rent is currently not available, it's important to compare your rental rates against the SAFMR. If you charge less than $1070, you might receive a surplus from the utility allowance. However, if you charge more than $1070, you will have a reimbursement gap that you must make up from other sources.

To illustrate, if you charge $1200 for rent, the government will only cover $1070 minus the tenant's contribution of $450, leaving you with a reimbursement gap of $525 per month. On the other hand, if you charge $900 for rent, the government will cover $795, leaving you with a surplus of $105 from the utility allowance.

In conclusion, the typical reimbursement gap or surplus for a two-bedroom apartment in ZIP 49023 is contingent upon the actual rent charged. Landlords should aim to align their rents closely with the SAFMR of $1070 to minimize financial risk and maximize stability in their cash flow.

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.