Section 8 Fair Market Rent (FMR) for ZIP 58103 - 2027

Investment Score for ZIP 58103

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	$740
1 Bedroom	$850
2 Bedrooms	$1,040
3 Bedrooms	$1,440
4 Bedrooms	$1,740
5 Bedrooms	$2,018
6 Bedrooms	$2,260
7 Bedrooms	$2,441
8 Bedrooms	$2,563

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	$1,040	$191,678	0.54%	F
3BR	$1,440	$269,612	0.53%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 58103 (Fargo, ND) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 58103 in Fargo, ND, is set by HUD for 2026. The FMR values are as follows: - 0BR: $720 - 1BR: $860 - 2BR: $1040 (which represents 21.2% of the median household income) - 3BR: $1450 - 4BR: $1740 These FMRs represent the maximum rent that a Section 8 voucher holder can pay for a unit of a given size. However, the actual rents in the area often exceed these figures. For instance, the Zillow median price for a 2BR property is $186,324, which translates into a monthly rental cost of approximately $776 based on a typical 1% of the purchase price as monthly rent. This is already above the FMR for a 2BR unit. Given the high occupancy rate of 94.4%, it suggests that there is a strong demand for housing in this area. The significant gap between the Zillow median and the FMR indicates that voucher holders face substantial constraints in finding affordable units. For example, a 2BR unit priced at $186,324 would have a monthly rent of $776, which is $136 above the FMR limit for such units. This means that voucher holders would need to find properties below the Zillow median price to stay within their budget. #### Affordability & Renter Profile ZIP code 58103 has a population of 48,796, with 57.9% of residents being renters. The median household income in this area is $58,801. Given that 21.2% of this income is allocated towards the FMR for a 2BR unit, it implies that the average renter spends about $12,446 annually on rent, assuming they live in a 2BR unit. This is a significant portion of their income, indicating that affordability is a critical issue for many residents. The high renter percentage and occupancy rate suggest that this is a tight market with limited supply relative to demand. As a result, landlords have a relatively strong position, and rents tend to be higher than the FMR. This makes it challenging for voucher holders to find suitable housing, especially since the Zillow median price for a 2BR unit is much higher than the FMR. #### Investor Angle From an investor's perspective, the ZIP code 58103 presents both opportunities and challenges. The Zillow median price for a 2BR unit is $186,324, and the price-to-FMR ratio is 14.9x. This means that the typical purchase price of a 2BR unit is 14.9 times the FMR for that unit. To determine if this ZIP code is cash-flow positive at FMR, we need to consider the potential rental income against the costs of ownership. If a 2BR unit is purchased for $186,324 and rented out at the FMR of $1040 per month, the annual rental income would be $12,480. Assuming a typical mortgage interest rate of around 5%, the annual mortgage payment would be approximately $10,000. After subtracting the mortgage payment from the rental income, the net annual cash flow would be $2,480. This is a positive cash flow, but it is minimal and may not cover other expenses such as maintenance, insurance, and property taxes. The investment grade for this ZIP code would likely be considered moderate. While there is a positive cash flow, the low margin suggests that any unexpected expenses could quickly erode profitability. Additionally, the high price-to-FMR ratio indicates that the purchase price is significantly higher than what voucher holders can afford, which could limit the pool of potential tenants. #### Specific Actionable Insights 1. **Focus on Units Below FMR**: Investors should focus on acquiring properties that are priced below the Zillow median to ensure that they can be rented out at or below the FMR. For example, a 2BR unit priced at $140,000 would generate a monthly rent of about $583, well below the FMR of $1040. This would allow for a more comfortable profit margin while still being accessible to voucher holders. 2. **Consider Smaller Units**: Given the high price-to-FMR ratio, smaller units like 0BR and 1BR might offer better investment opportunities. These units typically have lower purchase prices and can be rented out at or below the FMR without significant financial strain. For instance, a 1BR unit priced at $120,000 would generate a monthly rent of about $500, which is below the FMR of $860. 3. **Diversify Tenant Base**: While targeting Section 8 voucher holders, investors should also consider diversifying their tenant base to include non-voucher renters. This can help mitigate the risk associated with relying solely on voucher income, which is subject to government funding and policy changes. #### Bottom Line For Section 8-focused investors, the ZIP code 58103 presents a mixed picture. While there is a strong demand for rental housing, the high price-to-FMR ratio and limited supply of units priced below the Zillow median make it challenging to find profitable investments. Therefore, the recommendation is to **Hold** on to existing investments but be cautious about new acquisitions. Investors should focus on units priced below the Zillow median and consider diversifying their tenant base to include non-voucher renters.

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.