Section 8 Fair Market Rent (FMR) for ZIP 49221 - 2027

Investment Score for ZIP 49221

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	$840
1 Bedroom	$920
2 Bedrooms	$1,210
3 Bedrooms	$1,520
4 Bedrooms	$1,590
5 Bedrooms	$1,844
6 Bedrooms	$2,065
7 Bedrooms	$2,230
8 Bedrooms	$2,342

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
1BR	$920	$84,494	1.09%	B
2BR	$1,210	$158,566	0.76%	D
3BR	$1,520	$231,607	0.66%	D
4BR	$1,590	$264,272	0.6%	D
5BR	$1,844	$295,108	0.62%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 49221 (Adrian, MI) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 49221 is set by HUD for the year 2026. For a two-bedroom unit, the FMR is $1190, which represents 21.6% of the median household income in Adrian, MI. This indicates that the rent for a two-bedroom unit is relatively affordable compared to the average income level. However, it is important to understand how these FMRs compare to actual rents in the market. Actual rents in Adrian can be significantly higher than the FMR. The Zillow median price for a two-bedroom home is $152,141, which translates to a monthly rental cost of approximately $1014 if we assume a typical rental yield of 7%. Given that the Zillow median price is much higher than the FMR, the price-to-FMR ratio for a two-bedroom unit is 10.7x. This suggests that the actual rental costs are substantially higher than what the FMR allows. For voucher holders, this means that they face significant constraints in finding suitable housing. They would have to look for units priced at or below $1190 per month, which could be challenging given the high actual rental prices. Additionally, landlords might be hesitant to accept vouchers due to the lower rent compared to market rates. #### Affordability & Renter Profile In Adrian, 28.9% of households are renters, indicating a moderate rental market presence. With a median household income of $65,977, the affordability of housing is a key concern. A two-bedroom unit at $1190 per month is 21.6% of the median income, which is within the standard affordability threshold of 30%. However, the actual rental prices being 10.7 times higher suggest that many renters might struggle to find affordable housing. The occupancy rate of 91.1% indicates a relatively tight market, where most available units are occupied. This could lead to competition among renters, particularly those relying on Section 8 vouchers. Given the high actual rental prices, it is likely that the market is undersupplied with affordable units, making it difficult for low-income families to secure housing. #### Investor Angle From an investor perspective, the ZIP code 49221 presents both opportunities and challenges. The FMR for a two-bedroom unit is $1190, but the actual rental price based on the Zillow median is approximately $1014. While this is still below the market rate, it provides a reasonable cash flow for investors who are willing to accept Section 8 vouchers. However, the investment grade in this area depends on several factors, including the willingness of landlords to accept vouchers and the overall demand for affordable housing. Given the high actual rental prices and the tight market conditions, there is potential for positive cash flow if investors can secure properties at or below the FMR. The challenge lies in finding such properties, as the market is likely to favor higher-priced rentals. #### Specific Actionable Insights 1. **Focus on Affordable Units**: Investors should focus on acquiring properties that are priced at or below the FMR. For example, a two-bedroom unit priced at $1190 or less would be ideal for attracting Section 8 voucher holders. This strategy can help ensure a steady stream of tenants and avoid the risk of vacancy. 2. **Understand Local Rental Market**: It is crucial to understand the local rental market dynamics. Since the actual rental prices are significantly higher than the FMR, investors should consider areas with a higher concentration of affordable units. This can be achieved by analyzing rental listings and negotiating with sellers to acquire properties at a price that aligns with the FMR. 3. **Engage with Local Housing Authorities**: Building relationships with local housing authorities can provide valuable insights into the availability of vouchers and the preferences of voucher holders. This can help investors tailor their properties to meet the needs of potential tenants, increasing the likelihood of successful tenancy. #### Bottom Line For Section 8-focused investors, the ZIP code 49221 (Adrian, MI) presents a mixed picture. While the FMR is set at levels that are affordable relative to the median income, the actual rental market is much higher, making it challenging to find properties that fit within the FMR guidelines. Given the tight market and the high price-to-FMR ratio, the recommendation is to **Hold** or **Skip** this ZIP code unless investors can secure properties at or below the FMR. If investors can find such properties, it could be a **Buy** opportunity, but they must be prepared to navigate a competitive rental market and engage with local housing authorities to maximize their chances of success.

Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.