Section 8 Fair Market Rent (FMR) for ZIP 49320 - 2027

FY 2027 Fair Market Rent Rates

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

When considering whether to invest in ZIP code 49320 for Section 8 properties, follow these steps:

• Step 1: Can the Fair Market Rent (FMR) of $1,060 cover the debt service on a property priced at $195,432?
• If the debt service is less than $1,060 per month, then the answer is Yes. The FMR provides sufficient coverage for the mortgage payments.
• If the debt service exceeds $1,060 per month, then the answer is No. The FMR does not provide enough income to cover the monthly mortgage payments.
• Step 2: Is the market rent of $723 above, at, or below the FMR?
• If the market rent is below the FMR, then you can charge the higher FMR rate, making the investment more attractive. This scenario leads to a Yes.
• If the market rent equals the FMR, then you can still charge the FMR rate but there is no additional upside. This scenario also leads to a Yes, though with less potential profit.
• If the market rent is above the FMR, then you must consider if the difference between the market rent and the FMR is significant enough to justify the lower income from Section 8 tenants. This scenario can lead to either a Yes or No, depending on the landlord's risk tolerance and financial goals.
• Step 3: Are the demographics suitable for a Section 8 investment given that 30.6% of residents are renters and the days on market (DOM) is not available?
• If the percentage of renters is high enough and you can find other sources indicating a low DOM, leading to quick property turnover, then the answer is Yes. A high percentage of renters suggests strong demand.
• If the percentage of renters is too low, or if you find that the DOM is long, indicating slow turnover and difficulty in leasing properties, then the answer is No. There isn't enough demand to support a Section 8 investment.
• If the percentage of renters is moderate and you cannot determine the DOM, then the answer is It Depends. You will need to do further research into the local rental market to understand the demand better.

Note that the lack of days on market (DOM) data makes it challenging to assess the speed at which properties can be leased. Without this information, landlords must rely on other indicators such as the percentage of renters and market trends to make informed decisions.

Data Sources: FMR data from HUD (2027). 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.