Section 8 Fair Market Rent (FMR) for ZIP 60123 - 2027

Investment Score for ZIP 60123

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	$1,490
1 Bedroom	$1,580
2 Bedrooms	$1,790
3 Bedrooms	$2,300
4 Bedrooms	$2,630
5 Bedrooms	$3,051
6 Bedrooms	$3,417
7 Bedrooms	$3,690
8 Bedrooms	$3,875

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	$1,580	$184,589	0.86%	C
2BR	$1,790	$257,112	0.7%	D
3BR	$2,300	$321,897	0.71%	D
4BR	$2,630	$404,835	0.65%	D
5BR	$3,051	$426,091	0.72%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 60123 (Elgin, IL) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) figures for Elgin, IL (ZIP 60123) in 2026 indicate that the maximum allowable rent for a two-bedroom unit is $1590. However, the Zillow median price for a two-bedroom home in this area is $248,435, which translates to a price-to-FMR ratio of 13.0x. This suggests that the actual rental prices in the market are significantly higher than the FMR. For instance, a typical two-bedroom unit might rent for around $12,000 annually ($248,435 / 13.0x), which is much higher than the $1590 monthly limit set by the FMR. This discrepancy creates significant constraints for voucher holders. They will find it challenging to secure housing that meets their needs within the budgetary limits of the Section 8 program. The high cost of living relative to the FMR means that landlords who accept Section 8 vouchers will likely be limited to a smaller pool of properties, primarily those that are less desirable or located in less sought-after areas. #### Affordability & Renter Profile In ZIP code 60123, 27.2% of the population are renters, indicating a moderate rental market presence. The occupancy rate stands at 96.3%, suggesting that the market is relatively tight, with few vacant units available. Given the median household income of $87,693, the FMR for a two-bedroom unit represents approximately 21.8% of the median income. This percentage is within the affordability range for many residents, but the actual rental prices being much higher than the FMR make it difficult for lower-income households to find suitable housing without assistance. The tight market conditions mean that there is a strong demand for rental properties, especially those that are affordable. However, the high price-to-FMR ratio indicates that the majority of rental units are priced beyond what most voucher holders can afford. This situation could lead to increased competition among voucher holders for the limited number of affordable units, potentially driving up the cost of these units and making them less accessible. #### Investor Angle From an investor perspective, the ZIP code 60123 presents a mixed picture. While the overall rental market is tight and there is strong demand, the actual rental prices are substantially higher than the FMR. To determine if this ZIP code is cash-flow positive at FMR, we need to consider the potential rental income versus the costs associated with owning and maintaining a property. Given the FMR for a two-bedroom unit is $1590 per month, an investor would need to ensure that the total costs (including mortgage payments, property taxes, insurance, maintenance, and other expenses) do not exceed this amount. If we assume a conservative estimate where an investor can cover all costs and still generate a modest profit, the ZIP code would need to have rental units priced close to the FMR. However, the reality is that the average rental price is likely much higher due to the price-to-FMR ratio. The investment grade for this ZIP code would be considered low for Section 8-focused investors. The high price-to-FMR ratio means that landlords who rely solely on Section 8 vouchers will struggle to find enough tenants to cover their costs. Additionally, the limited supply of affordable units and the strong competition for these units could further complicate the investment landscape. #### Specific Actionable Insights 1. **Target Affordable Units**: Investors should focus on acquiring properties that are priced closer to the FMR. For example, a two-bedroom unit priced at $1590 or slightly below would be more attractive to voucher holders and would provide a better chance of generating positive cash flow. 2. **Consider Smaller Units**: Given the high cost-to-FMR ratio, smaller units such as one-bedroom or studio apartments might be more viable options. These units typically have lower FMRs, with a one-bedroom unit having an FMR of $1410. By targeting smaller units, investors can increase their chances of finding tenants who can use their vouchers effectively. 3. **Explore Government Incentives**: Investors might want to explore government incentives or subsidies designed to support affordable housing. These programs could help offset some of the costs associated with renting out units at or near the FMR, thereby improving the financial viability of such investments. #### Bottom Line For Section 8-focused investors, the ZIP code 60123 (Elgin, IL) is not recommended for purchase. The high price-to-FMR ratio and the tight rental market make it challenging to find properties that are both affordable and profitable. Instead, investors should consider holding onto existing properties in this ZIP code or skipping this market altogether in favor of areas with a more favorable price-to-FMR ratio and a larger pool of affordable units. In summary, while Elgin has a strong rental market, the mismatch between actual rental prices and the FMR makes it a difficult environment for Section 8 voucher holders and investors focused on this program.

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.