Section 8 Fair Market Rent (FMR) for ZIP 49508 - 2027

Investment Score for ZIP 49508

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	$1,310
1 Bedroom	$1,370
2 Bedrooms	$1,640
3 Bedrooms	$2,130
4 Bedrooms	$2,430
5 Bedrooms	$2,819
6 Bedrooms	$3,157
7 Bedrooms	$3,410
8 Bedrooms	$3,581

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	$1,640	$258,175	0.64%	D
3BR	$2,130	$329,912	0.65%	D
4BR	$2,430	$372,461	0.65%	D
5BR	$2,819	$406,512	0.69%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 49508 (Kentwood, MI) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 49508 is set by HUD for the year 2026. For a two-bedroom unit, the FMR is $1550. This amount represents 26.5% of the median household income in Kentwood, which is $70,120. However, the actual rental market price for a two-bedroom unit, according to Zillow, is $253,287, which translates into a monthly rent of approximately $2110 based on typical mortgage payments and property taxes. The price-to-FMR ratio of 13.6x indicates that the actual market rent is significantly higher than the FMR. This means that Section 8 voucher holders face significant constraints in finding affordable housing. The difference between the FMR and the actual market rent suggests that landlords may be reluctant to accept vouchers due to the lower reimbursement rates compared to what they could potentially charge in the open market. For instance, a landlord renting a two-bedroom unit at the market rate would receive $2110 per month, while a voucher holder would only cover $1550, leaving a shortfall of $560 per month. #### Affordability & Renter Profile In ZIP code 49508, 39.3% of the population are renters, indicating a substantial demand for rental properties. With a median household income of $70,120, the affordability of housing is a critical issue for many residents. The occupancy rate of 95.5% suggests that the rental market is relatively tight, with few vacant units available. Given that the FMR for a two-bedroom unit is only 26.5% of the median income, it implies that a significant portion of the population may struggle to find housing that fits their budget, especially if they rely solely on Section 8 vouchers. #### Investor Angle From an investor perspective, the ZIP code 49508 presents both opportunities and challenges. The FMR for a two-bedroom unit is $1550, but the actual market rent is around $2110. This gap means that investors who can secure tenants paying the market rate will likely see positive cash flow. However, those relying solely on Section 8 voucher holders will face a negative cash flow scenario, as the reimbursement rate is lower than the market rent. To determine the investment grade, we need to consider several factors including the vacancy rate, rental demand, and the overall economic stability of the area. With a low vacancy rate and high demand for rental properties, the investment grade for this ZIP code is moderate to good, provided that investors can attract tenants willing to pay market rates. However, for those specifically targeting Section 8 voucher holders, the investment grade is poor due to the financial constraints mentioned earlier. #### Specific Actionable Insights 1. **Target Market Renters**: Investors should focus on attracting tenants who can pay the market rate of $2110 per month for a two-bedroom unit. This strategy will ensure positive cash flow and mitigate the risk associated with relying solely on Section 8 vouchers. 2. **Diversify Tenant Mix**: To balance the financial risks, investors might consider diversifying their tenant mix. By having a combination of market-rate tenants and Section 8 voucher holders, they can achieve a more stable cash flow. For example, a property with three units could have two rented at the market rate ($2110 each) and one rented through a Section 8 voucher ($1550). This would result in a net monthly income of $5770, which is more sustainable than relying entirely on voucher holders. 3. **Consider Smaller Units**: Given the constraints for larger units, investors might want to consider focusing on smaller units such as one-bedroom apartments. The FMR for a one-bedroom unit is $1290, which is closer to the median income percentage, making it easier for voucher holders to afford. Additionally, the demand for smaller units is often higher, providing better occupancy rates. #### Bottom Line For investors focused on Section 8 vouchers, the recommendation is to **Skip** this ZIP code due to the significant gap between FMR and market rent. The financial constraints make it challenging to achieve positive cash flow when relying solely on voucher holders. Instead, investors should look for areas where the FMR is closer to the market rent, or they should consider diversifying their tenant mix to include market-rate renters alongside voucher holders. If investors are willing to take on the challenge of managing a mixed tenant portfolio, they might consider **Hold** positions in smaller units like one-bedroom apartments, where the FMR is more aligned with the median income percentage. Otherwise, they should **Buy** properties in other ZIP codes where the rental market dynamics are more favorable for Section 8 voucher holders.

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.