Section 8 Fair Market Rent (FMR) for ZIP 60120 - 2027

Investment Score for ZIP 60120

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	$1,590
1 Bedroom	$1,690
2 Bedrooms	$1,910
3 Bedrooms	$2,460
4 Bedrooms	$2,810
5 Bedrooms	$3,260
6 Bedrooms	$3,651
7 Bedrooms	$3,943
8 Bedrooms	$4,140

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	$1,690	$182,350	0.93%	C
2BR	$1,910	$256,741	0.74%	D
3BR	$2,460	$317,640	0.77%	D
4BR	$2,810	$366,141	0.77%	D
5BR	$3,260	$375,768	0.87%	C

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 60120 (Elgin, IL) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 60120 in Elgin, IL, for 2026 is set at $1640 for a two-bedroom unit. This figure represents 23.9% of the median household income in the area, which stands at $82,449. The FMR is intended to reflect the average rent for a modest apartment in good condition that is suitable for occupancy by low-income families. However, the actual rental market in Elgin appears to be significantly higher. According to Zillow, the median price for a two-bedroom home is $247,690, which translates to a monthly mortgage payment of approximately $1180 if financed at a typical rate. When considering property taxes, insurance, and maintenance costs, the total monthly cost can easily exceed the FMR, constraining voucher holders' ability to find affordable housing. #### Affordability & Renter Profile The population of ZIP 60120 is 51,225, with 34.3% of residents being renters. This indicates a substantial demand for rental properties in the area. The occupancy rate of 97.2% suggests that the market is relatively tight, with few vacant units available. Given the high price-to-FMR ratio of 12.6x, it is clear that the rental market is far from affordable for those relying on Section 8 vouchers. The median household income of $82,449 implies that many residents are middle-class, but the significant portion of renters indicates that there is still a considerable segment of the population that struggles with housing affordability. #### Investor Angle From an investor perspective, the ZIP code 60120 presents both opportunities and challenges. While the median home value is quite high at $247,690, the FMR for a two-bedroom unit is only $1640. This means that investors looking to acquire properties in this area would need to ensure that their rental rates align with the FMR to remain competitive in the Section 8 market. However, given the high price-to-FMR ratio, it is unlikely that most properties will generate positive cash flow when rented at FMR levels. The investment grade for this ZIP code would be considered moderate due to the tight market conditions and the potential for appreciation in home values, but the limited cash flow from renting at FMR could be a drawback. #### Specific Actionable Insights 1. **Target Properties Below Median Value**: Investors should focus on acquiring properties below the median home value of $247,690. For instance, a two-bedroom home priced around $180,000 would have a lower monthly mortgage payment, making it more feasible to rent out at FMR levels while still generating some positive cash flow. This strategy can help mitigate the risk associated with the high price-to-FMR ratio. 2. **Consider Smaller Units**: Given the high FMR for larger units, investors might consider focusing on smaller units such as one-bedroom apartments. The FMR for a one-bedroom unit is $1460, which is slightly lower than the two-bedroom FMR. This could provide a better balance between rental income and mortgage payments, especially if the property is priced closer to the median value. 3. **Look for Rental Opportunities Outside of Home Ownership**: Instead of purchasing homes, investors might explore opportunities to purchase or lease rental properties that are already established as rentals. These properties are likely to be priced more in line with rental market conditions and may offer more flexibility in terms of rental rates and occupancy. #### Bottom Line Given the high price-to-FMR ratio and the tight market conditions, the recommendation for Section 8-focused investors is to **Skip** this ZIP code unless they can identify specific opportunities that meet the criteria outlined above. The high cost of entry and limited cash flow potential make it challenging to achieve a positive return on investment solely through rental income at FMR levels. Investors should carefully evaluate the local market dynamics and consider alternative strategies or ZIP codes with more favorable conditions for Section 8 properties.

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.