Section 8 Fair Market Rent (FMR) for ZIP 49774 - 2027

FY 2027 Fair Market Rent Rates

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

A decision tree for whether to invest in ZIP code 49774 for Section 8 properties involves three key questions based on the provided data.

1. Does the Fair Market Rent (FMR) of $1,060 cover the debt service on a property priced at $202,807?

To determine if the FMR clears the debt service, you need to calculate the monthly mortgage payment on a $202,807 property. Assuming a typical mortgage rate and term, the monthly payment would likely be around $800-$900. Given that the FMR is $1,060, the answer is yes. The income from a Section 8 voucher would cover the debt service, leaving some buffer for maintenance and other expenses.

2. Is the market rent of $800 above, at, or below the FMR?

The market rent of $800 is below the FMR of $1,060. This indicates that Section 8 tenants can pay up to $1,060, which is higher than what non-subsidized tenants might pay. Thus, landlords could potentially benefit financially from accepting Section 8 vouchers, as they can command rents closer to the FMR rather than the lower market rate.

3. Are the 5.6% renters and the day DOM (Days on Market) sufficient to ensure demand?

The percentage of renters in ZIP 49774 is 5.6%. However, the Days on Market (DOM) figure is listed as N/A, which means there's insufficient data to evaluate how quickly rental properties are typically leased in this area. Given only the renter percentage, it suggests a relatively low demand for rentals compared to other areas. But without DOM data, it's impossible to fully assess the market dynamics.

If the first two conditions are met, then the decision hinges on the third question. Here, the analysis splits into two branches:

• Yes: If the local rental market is robust enough to support quick leasing despite the low renter percentage, then purchasing a Section 8 property in ZIP 49774 could be a viable investment strategy. The higher potential rent from Section 8 vouchers compared to the market rate compensates for the lower number of renters.
• No: If the rental market is slow and listings stay on the market for extended periods, then the low renter percentage combined with high DOM figures would suggest insufficient demand. In this case, investing in ZIP 49774 for Section 8 properties would not be advisable.

The final decision comes down to evaluating the rental market speed. With clear data on DOM, an investor can make an informed choice about the viability of Section 8 investments in ZIP 49774.

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.