Section 8 Fair Market Rent (FMR) for ZIP 60089 - 2027

Investment Score for ZIP 60089

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	$2,380
1 Bedroom	$2,520
2 Bedrooms	$2,850
3 Bedrooms	$3,670
4 Bedrooms	$4,190
5 Bedrooms	$4,860
6 Bedrooms	$5,443
7 Bedrooms	$5,878
8 Bedrooms	$6,172

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
1BR	$2,520	$171,128	1.47%	A
2BR	$2,850	$277,474	1.03%	B
3BR	$3,670	$434,156	0.85%	C
4BR	$4,190	$584,115	0.72%	D
5BR	$4,860	$775,239	0.63%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 60089 (Buffalo Grove, IL) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for Buffalo Grove, IL, in ZIP code 60089, is set by HUD for 2026. The FMRs for different bedroom sizes are as follows: - 0BR: $2130 - 1BR: $2270 - 2BR: $2560 (which is 23.7% of the median household income) - 3BR: $3300 - 4BR: $3810 These FMRs represent the maximum rent that a Section 8 voucher holder can pay. However, comparing these figures to actual rental prices in the area provides insight into the dynamics of the voucher program. For instance, the Zillow median price for a 2BR home in this ZIP code is $281,220. Given that the price-to-FMR ratio is 9.2x, it suggests that the actual market rents are significantly higher than the FMRs. This means that voucher holders face significant constraints in finding affordable housing. A 2BR unit priced at $2560 per month would be considered affordable under the FMR guidelines, but the reality is that many units in the market exceed this amount. #### Affordability & Renter Profile Buffalo Grove has a median household income of $129,401, which places it in a high-income bracket. With 20.2% of the population being renters, the market is relatively tight. The occupancy rate of 97.7% indicates that there is little vacancy, suggesting strong demand for rental properties. The high median income and low percentage of renters imply that those who do rent are likely to be financially stable individuals or families who can afford higher rents. However, the FMRs are set at levels that are far below what the typical market rent might be, making it challenging for voucher holders to find suitable housing. Given the high median income and the tight market, it is likely that the majority of renters are not heavily reliant on government assistance. Instead, they are probably able to pay market rates, which are much higher than the FMRs. This situation creates a mismatch between the needs of voucher holders and the availability of affordable units. #### Investor Angle From an investor’s perspective, the ZIP code 60089 offers a mixed picture when considering the FMRs. The FMRs are set at levels that are significantly lower than the actual market rents. For example, a 2BR unit with an FMR of $2560 is only about 9.1% of the median household income. This means that even if an investor were to rent out a property at the FMR, they would still need to ensure that their investment is cash-flow positive. To determine if the investment is cash-flow positive, we need to consider the costs associated with owning and maintaining a rental property. These costs include mortgage payments, property taxes, insurance, maintenance, and other expenses. If we assume a conservative estimate of 10% of the median home value ($281,220) for annual expenses, this would equate to approximately $28,122 annually, or $2,343.50 monthly. At an FMR of $2560 for a 2BR unit, the net cash flow would be around $216.50 per month, assuming the property is rented out at the FMR. However, given the high price-to-FMR ratio of 9.2x, it is more likely that investors would be able to charge market rates, which would be significantly higher than the FMRs. This would make the investment more attractive from a cash-flow standpoint. The investment grade for this ZIP code would be considered good due to the strong demand and high median income, but the challenge lies in attracting voucher holders who are limited by the FMRs. #### Specific Actionable Insights 1. **Focus on Lower-Rent Units**: Investors should focus on acquiring properties that can be rented out at or near the FMRs. For example, a 2BR unit priced at $2560 per month would be ideal for voucher holders. This strategy would help attract tenants who rely on Section 8 vouchers while ensuring compliance with HUD regulations. 2. **Consider Multi-Family Properties**: Given the high price-to-FMR ratio, single-family homes may not be the most viable option for Section 8-focused investors. Instead, multi-family properties such as apartments or townhouses could offer better opportunities. These properties often have lower unit values compared to single-family homes, making them more affordable for voucher holders. 3. **Offer Incentives for Non-Voucher Tenants**: To balance the cash flow, investors could consider offering incentives to non-voucher tenants who can pay market rates. This could include amenities like parking, laundry facilities, or modern appliances, which would make the units more attractive to higher-paying tenants. #### Bottom Line For Section 8-focused investors, the ZIP code 60089 presents both challenges and opportunities. While the high price-to-FMR ratio makes it difficult to find affordable units for voucher holders, the strong demand and high median income suggest a robust rental market. Therefore, the recommendation would be to **Hold** or **Skip** this ZIP code unless you can acquire properties at a price point that aligns closely with the FMRs. Investors should carefully evaluate the potential for attracting voucher holders and balance this with the ability to generate sufficient cash flow from non-voucher tenants. In summary, the tight market and high median income make it challenging for Section 8 voucher holders to find affordable housing. Investors should proceed with caution and focus on properties that can be rented out at or near the FMRs to ensure compliance and viability.

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.