Section 8 Fair Market Rent (FMR) for ZIP 60505 - 2027

Investment Score for ZIP 60505

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	$1,510
1 Bedroom	$1,600
2 Bedrooms	$1,810
3 Bedrooms	$2,330
4 Bedrooms	$2,660
5 Bedrooms	$3,086
6 Bedrooms	$3,456
7 Bedrooms	$3,732
8 Bedrooms	$3,919

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	$1,600	$139,252	1.15%	B
2BR	$1,810	$217,192	0.83%	C
3BR	$2,330	$263,399	0.88%	C
4BR	$2,660	$290,208	0.92%	C
5BR	$3,086	$315,314	0.98%	C

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 60505 (Aurora, IL) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 60505 is set by HUD for 2026, with specific rates for different bedroom sizes. The FMR for a two-bedroom unit is $1610, which represents 26.4% of the median household income of $73,284. This indicates that a significant portion of the population can afford to rent a two-bedroom unit without financial strain. However, the actual rents in Aurora are likely higher than these FMRs, given the price-to-FMR ratio of 10.7x for a two-bedroom unit. This means that the actual rent for a two-bedroom unit is approximately $17,122 annually, compared to the FMR of $19,320 over five years. For voucher holders, this creates a constraint as they may struggle to find units that accept their vouchers due to the disparity between FMR and actual rents. #### Affordability & Renter Profile With 41.6% of the population renting, Aurora has a substantial rental market. The occupancy rate of 94.1% suggests that there is a high demand for rental properties, indicating a tight market. Given the median household income of $73,284, the majority of renters are likely working-class families who can afford modest housing but may face challenges in finding affordable units. The Zillow median price for a two-bedroom home is $206,386, which is significantly higher than the FMR, further highlighting the affordability gap. This tight market and high demand make it challenging for low-income renters to find suitable housing, especially those relying on Section 8 vouchers. #### Investor Angle From an investor perspective, the ZIP code 60505 presents both opportunities and challenges. The FMR for a two-bedroom unit is $1610 per month, but the actual rent is likely much higher given the price-to-FMR ratio. If we assume the actual rent is close to the FMR, then the potential annual rental income would be around $19,320. However, considering the tight market and high demand, investors could potentially charge closer to the actual rent levels, which might be around $17,122 annually. This would still leave room for profit, although the exact margin would depend on property costs, maintenance, and other expenses. The investment grade in this area is moderate to high, given the strong demand and relatively stable occupancy rates. However, investors should be aware of the risk associated with the high price-to-FMR ratio, which could indicate a volatile market. Additionally, the requirement for properties to be priced at or below the FMR could limit the number of available tenants willing to pay the full market rate, thus affecting cash flow. #### Specific Actionable Insights 1. **Focus on Properties Below FMR**: Investors should consider acquiring properties that are priced below the FMR to ensure a steady stream of Section 8 tenants. For instance, a two-bedroom unit priced at $1500 per month would be more attractive to voucher holders and could provide a reliable source of income. 2. **Diversify Tenant Mix**: To mitigate the risk of relying solely on Section 8 tenants, investors should aim to diversify their tenant mix. Offering a range of units at different price points could attract both voucher holders and market-rate tenants, thereby stabilizing cash flow. 3. **Consider Renovation Projects**: Given the high demand for rental properties, investors might benefit from purchasing older homes that need renovation. By upgrading these properties and pricing them just below the FMR, they can attract Section 8 tenants while also increasing the overall value of the property. #### Bottom Line For Section 8-focused investors, the ZIP code 60505 offers a mixed outlook. While there is a strong demand for rental properties, the high price-to-FMR ratio poses a challenge. The recommendation would be to **Hold** if the investor already owns properties in this area, as the demand is robust and occupancy rates are high. However, for new investors looking to enter the market, the recommendation would be to **Skip**, unless they can find properties priced well below the FMR. The tight market and high demand suggest that finding such properties may be difficult, and the risk of lower-than-market rental income could outweigh the benefits for new investments.

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.