Section 8 Fair Market Rent (FMR) for ZIP 49423 - 2027

Investment Score for ZIP 49423

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	$1,100
1 Bedroom	$1,290
2 Bedrooms	$1,530
3 Bedrooms	$1,910
4 Bedrooms	$2,260
5 Bedrooms	$2,622
6 Bedrooms	$2,937
7 Bedrooms	$3,172
8 Bedrooms	$3,331

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
1BR	$1,290	$250,216	0.52%	F
2BR	$1,530	$289,461	0.53%	F
3BR	$1,910	$351,306	0.54%	F
4BR	$2,260	$412,529	0.55%	F
5BR	$2,622	$560,951	0.47%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 49423 (Holland, MI) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 49423 is set by HUD for 2026, with the following rates: - 0BR: $1050 - 1BR: $1240 - 2BR: $1480 (which represents 21.7% of the median household income) - 3BR: $1870 - 4BR: $2150 These FMRs represent the maximum amount that a Section 8 voucher holder can pay for rent. However, it is important to understand how these FMRs compare to actual rental prices in the area. According to Zillow, the median price for a 2BR property in this ZIP code is $282,567. The price-to-FMR ratio for a 2BR unit is 15.9x, indicating that the actual market rents are significantly higher than the FMRs. This means that voucher holders are constrained by the limited availability of units that fall within their budget. For example, a voucher holder with a 2BR allocation would have to find a unit renting for $1480 or less, which is likely to be challenging given the high market rents. #### Affordability & Renter Profile ZIP code 49423 has a population of 47,060, with 25.4% of residents being renters. The occupancy rate is 92.4%, suggesting that the rental market is relatively tight. Given the median household income of $81,858, the affordability of housing becomes a critical issue for low-income renters. A 2BR unit at the FMR of $1480 constitutes 21.7% of the median income, which is a significant portion but still manageable for some households. However, the high price-to-FMR ratio indicates that many units are priced well above what voucher holders can afford. This suggests that the market is skewed towards higher-income renters who can afford the actual market rents, leaving fewer options for those relying on Section 8 vouchers. #### Investor Angle From an investor perspective, the ZIP code's high price-to-FMR ratio poses challenges for cash flow. If an investor were to purchase a 2BR property for $282,567 and rent it out at the FMR of $1480, they would face significant pressure to manage expenses effectively. The typical cash flow analysis involves comparing the monthly rental income to the total monthly costs, including mortgage payments, property taxes, insurance, maintenance, and other expenses. Given the median home value, a conservative estimate for a mortgage payment (assuming a 30-year fixed-rate mortgage at 4%) would be approximately $1330 per month. Adding in property taxes (at 1.5%), insurance ($100/month), and maintenance ($100/month), the total monthly cost could easily exceed the FMR. This implies that investors focusing on Section 8 tenants might struggle to achieve positive cash flow unless they can secure lower-cost properties or reduce expenses significantly. The investment grade for this ZIP code is moderate to low due to the high price-to-FMR ratio. Investors should carefully evaluate the potential for rental income versus the costs of ownership before making any purchases. #### Specific Actionable Insights 1. **Target Lower-Cost Properties**: Investors should focus on acquiring properties that are below the median market value. For instance, purchasing a 2BR property for around $180,000 would result in a mortgage payment of approximately $850 per month, allowing for a more comfortable margin when renting at the FMR of $1480. This strategy would help ensure positive cash flow. 2. **Consider Smaller Units**: Given the high price-to-FMR ratio, smaller units (like 0BR or 1BR) might offer better opportunities for positive cash flow. For example, a 1BR unit renting at $1240 would be more affordable compared to a 2BR unit renting at $1480. Additionally, the demand for smaller units might be higher among voucher holders due to the scarcity of affordable larger units. 3. **Utilize Property Management Services**: Due to the complexity of managing Section 8 properties, utilizing professional property management services can be beneficial. These services can handle the administrative tasks, tenant screening, and compliance issues associated with Section 8, potentially reducing the overall burden on the investor. #### Bottom Line Based on the analysis, the recommendation for Section 8-focused investors in ZIP code 49423 is to **Skip** purchasing properties at the median market value. The high price-to-FMR ratio makes it difficult to achieve positive cash flow, especially considering the tight rental market and the limited number of units that fall within the FMR range. Instead, investors should look for opportunities in areas with lower price-to-FMR ratios or consider alternative investment strategies that do not rely solely on Section 8 vouchers.

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.