Section 8 Fair Market Rent (FMR) for ZIP 57248 - 2027

FY 2027 Fair Market Rent Rates

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

A landlord considering ZIP code 57248 for Section 8 investments must follow a structured decision-making process based on financial metrics and market conditions.

Step 1: Can the Fair Market Rent (FMR) of $1,180 cover the debt service on a property valued at $369,367?

• Yes: The FMR of $1,180 can potentially clear the debt service on a $369,367 property if the interest rates and loan terms are favorable. This requires calculating the monthly mortgage payment and comparing it against the FMR.
• No: If the FMR cannot cover the debt service, then purchasing in this area is not advisable unless the landlord plans to use other sources of income to support the investment.
• It Depends: The outcome hinges on the specific loan terms such as the interest rate and amortization period. A lower interest rate or a longer amortization period could make the FMR sufficient to cover debt service.

Step 2: How does the market rent of $1,089 compare to the FMR?

• Above FMR: If the market rent exceeds $1,180, the landlord has the flexibility to charge higher rents outside of Section 8, which could be beneficial for cash flow and profitability.
• At FMR: Market rents aligning with the FMR suggest that landlords will likely need to rely on Section 8 tenants to fill vacancies, making it a more specialized investment.
• Below FMR: With market rents at $1,089, landlords may struggle to attract non-Section 8 tenants, potentially limiting the property's appeal to a broader tenant base.

Step 3: Is there enough demand with 21.8% of residents being renters and an unknown number of days on the market (DOM)?

• Yes: If the Days on Market (DOM) is low, indicating quick turnover, combined with 21.8% of residents being renters, there is likely sufficient demand to justify an investment. However, the exact DOM figure is needed for a definitive assessment.
• No: A high DOM suggests that rental properties take longer to lease, which might indicate weak demand or challenging market conditions. In this scenario, the 21.8% rental rate alone is insufficient to guarantee strong demand.
• It Depends: The 21.8% rental rate indicates a moderate level of demand, but the lack of DOM data makes it difficult to determine the speed at which properties are leased. Further investigation into the local rental market trends is necessary to make a final decision.

To conclude, a landlord must weigh the FMR coverage against debt service, the alignment of market rents with FMR, and the strength of rental demand. Without the DOM figure, the analysis remains incomplete, but the initial indicators provide a foundation for further exploration.

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.