Section 8 Fair Market Rent (FMR) for ZIP 53711 - 2027

Investment Score for ZIP 53711

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	$1,160
1 Bedroom	$1,340
2 Bedrooms	$1,530
3 Bedrooms	$2,020
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: 2026-07-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
1BR	$1,340	$301,887	0.44%	F
2BR	$1,530	$388,572	0.39%	F
3BR	$2,020	$490,260	0.41%	F
4BR	$2,260	$611,424	0.37%	F
5BR	$2,622	$719,971	0.36%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 53711 (Madison, WI) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 53711 in Madison, WI, is set by HUD for 2026 as follows: $1210 for 0BR units, $1420 for 1BR units, $1620 for 2BR units, $2140 for 3BR units, and $2400 for 4BR units. The FMR for 2BR units is particularly relevant since it represents 19.3% of the median household income in the area, which stands at $100,735. This indicates that the cost of renting a 2BR unit is relatively affordable compared to the average income level. However, the actual rental market in ZIP 53711 is significantly higher than the FMR. For instance, the Zillow median price for a 2BR rental property is $379,553, which translates to a monthly rent of approximately $3,163 if we assume a standard 12% cap rate. This is nearly double the FMR of $1620. Therefore, voucher holders face significant constraints in finding affordable housing within the parameters of their vouchers. They would likely need to look for smaller units or negotiate with landlords who might accept lower rents. #### Affordability & Renter Profile ZIP code 53711 has a population of 51,279, with 37.6% being renters. This suggests a substantial demand for rental properties, indicating that the market is relatively tight. With an occupancy rate of 96.6%, there is little room for vacancy, further supporting the notion that the rental market is competitive. Given the high median household income and the relatively high rent-to-income ratio, the typical renter in this ZIP code is likely to be a professional or a family with a stable income. However, the disparity between the FMR and the actual rental prices means that many low- to moderate-income families struggle to find housing they can afford without assistance. This makes the Section 8 program crucial for maintaining a diverse community in the area. #### Investor Angle From an investor perspective, the ZIP code 53711 presents a challenging scenario when considering cash flow based on FMR. The price-to-FMR ratio for 2BR units is 19.5x, meaning that the median home value is 19.5 times the FMR. This ratio is exceptionally high, indicating that properties are overpriced relative to the rental market supported by FMRs. To illustrate, if an investor purchases a 2BR unit for the Zillow median price of $379,553 and aims to achieve a 12% cap rate, the expected monthly rent would be around $3,163. However, the FMR allows only up to $1620 per month. Thus, the investment would not be cash-flow positive at FMR levels. Additionally, the high purchase price and the limited ability to raise rents due to the FMR ceiling make this ZIP code less attractive for investors seeking immediate returns. #### Specific Actionable Insights 1. **Target Smaller Units**: Investors should consider focusing on 0BR and 1BR units, which have lower FMRs ($1210 and $1420 respectively). These units are more likely to be rented out at FMR rates, providing better cash flow potential. The median household income supports the idea that these units could still attract stable tenants. 2. **Negotiate with Landlords**: Given the high actual rental prices, landlords might be willing to accept slightly below-market rents in exchange for guaranteed payments through the Section 8 program. Investors could explore opportunities to purchase properties and then lease them back to existing owners or other landlords under Section 8 terms. 3. **Consider Long-Term Appreciation**: While the current cash flow might be negative, the high median household income and strong demand for rentals suggest that property values could appreciate over time. Investors looking for long-term gains rather than immediate cash flow might find this ZIP code appealing. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 53711 is to **skip**. The high price-to-FMR ratio and the tight rental market make it difficult to achieve positive cash flow. Instead, investors might want to look into ZIP codes with lower ratios or more oversupplied rental markets where the gap between FMR and actual rents is narrower. If investors are willing to take a long-term view and focus on appreciation rather than immediate returns, they could consider smaller units or negotiating with landlords for below-market rents. However, given the current dynamics, the risk of negative cash flow is too high for most investors to justify entering this market purely for Section 8 properties.

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.