Section 8 Fair Market Rent (FMR) for ZIP 60506 - 2027

Investment Score for ZIP 60506

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	$1,530
1 Bedroom	$1,620
2 Bedrooms	$1,830
3 Bedrooms	$2,350
4 Bedrooms	$2,690
5 Bedrooms	$3,120
6 Bedrooms	$3,494
7 Bedrooms	$3,774
8 Bedrooms	$3,963

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	$1,830	$248,572	0.74%	D
3BR	$2,350	$309,130	0.76%	D
4BR	$2,690	$384,850	0.7%	D
5BR	$3,120	$413,589	0.75%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 60506 (Aurora, IL) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 60506 in Aurora, IL, is set by HUD for 2026. The FMR for a two-bedroom unit is $1690, which represents 25.5% of the median household income of $79,517. This indicates that the rent for a two-bedroom unit is relatively affordable compared to the average income in the area. However, the actual rental market price for a two-bedroom unit is significantly higher, with Zillow reporting a median price of $239,410. This translates to a price-to-FMR ratio of 11.8x, meaning that the market price is nearly 12 times the FMR. For voucher holders, this presents a significant challenge, as they would likely struggle to find units that fall within their budget. The FMR is designed to ensure that housing is affordable for low-income households, but in Aurora, the gap between FMR and actual market rents is substantial. #### Affordability & Renter Profile Given that 32.4% of the population in ZIP 60506 are renters, there is a notable segment of the community that relies on rental housing. The occupancy rate of 97.6% suggests that the rental market is quite tight, with very few vacant units available. This high occupancy rate can be attributed to the strong demand for rental properties, driven by both the sizeable renter population and the limited supply of affordable housing. With the median household income being $79,517, it is clear that many residents are middle-class families who might find it difficult to afford the high rental prices without assistance. The tight market conditions make it challenging for renters to find affordable options, especially those relying on Section 8 vouchers. #### Investor Angle From an investor perspective, the ZIP code 60506 presents mixed opportunities. While the rental market is robust and the occupancy rates are high, the actual rents far exceed the FMR. This means that if an investor is looking to attract Section 8 voucher holders, they must set their rents below the market rate, which could impact profitability. To determine if this ZIP code is cash-flow positive at FMR, we need to consider the typical operating costs and potential vacancy rates. Given the occupancy rate of 97.6%, the likelihood of maintaining a low vacancy rate is favorable. However, the FMR of $1690 for a two-bedroom unit is well below the market median of $239,410. An investor would need to carefully balance the lower rent against the potential for higher occupancy and the overall cost structure of the property. #### Specific Actionable Insights 1. **Focus on Affordable Units**: Investors should focus on developing or acquiring units that are priced close to the FMR. For example, a two-bedroom unit priced at $1690 would be attractive to Section 8 voucher holders. This strategy would help in securing tenants and maintaining a steady cash flow, despite the lower rent compared to market rates. 2. **Utilize Local Housing Assistance Programs**: Given the high price-to-FMR ratio, local housing assistance programs could be beneficial. These programs often provide additional subsidies or incentives for landlords who accept Section 8 vouchers. Engaging with these programs could help offset the financial impact of setting rents below market levels. 3. **Consider Multi-Family Properties**: Given the high occupancy rate, multi-family properties might offer better returns. A portfolio of several units could spread out the risk and provide a more stable income stream. Additionally, multi-family properties often have economies of scale that can reduce per-unit operating costs. #### Bottom Line For Section 8-focused investors, the ZIP code 60506 presents a challenging yet potentially rewarding market. The high occupancy rates and strong demand for rental properties indicate that there is a solid tenant base. However, the significant gap between FMR and market rents means that investors will need to be strategic about pricing and possibly seek additional subsidies to maintain profitability. Based on the data provided, the recommendation is to **Hold** for now. Investors should closely monitor the local rental market and explore partnerships with local housing assistance programs to improve the feasibility of Section 8 investments in this area.

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.