Section 8 Fair Market Rent (FMR) for ZIP 60616 - 2027

Investment Score for ZIP 60616

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	$1,890
1 Bedroom	$2,010
2 Bedrooms	$2,270
3 Bedrooms	$2,920
4 Bedrooms	$3,330
5 Bedrooms	$3,863
6 Bedrooms	$4,327
7 Bedrooms	$4,673
8 Bedrooms	$4,907

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	$2,010	$261,234	0.77%	D
2BR	$2,270	$377,163	0.6%	D
3BR	$2,920	$490,378	0.6%	F
4BR	$3,330	$673,045	0.49%	F
5BR	$3,863	$708,620	0.55%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 60616 (Chicago, IL) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 60616, as set by HUD for 2026, is $1970 for a two-bedroom apartment. This amount represents 32.0% of the median household income in the area, which stands at $73,819. However, the actual rental market in this ZIP code is significantly higher. The Zillow median price for a two-bedroom home is $371,829, which translates into a monthly rent that would be much higher than the FMR if we consider typical mortgage payments and property management costs. Given the price-to-FMR ratio of 15.7x, it is clear that actual rents far exceed the FMR. For instance, a two-bedroom apartment priced at $371,829 would likely have a monthly rent of around $3,098 (assuming a 4% cap rate), which is more than double the FMR. This creates significant constraints for voucher holders, who might struggle to find properties within their budget. They will likely need to look for units below the FMR or negotiate with landlords willing to accept lower rents. #### Affordability & Renter Profile ZIP code 60616 has a high renter population of 60.5%, indicating a strong demand for rental housing. With a median household income of $73,819, the affordability of housing is a critical issue. The occupancy rate of 94.1% suggests that the rental market is quite tight, with few vacant units available. This high occupancy rate means that there is little room for new supply to enter the market without putting upward pressure on rents. Given the high proportion of renters and the tight market conditions, the demand for affordable housing is particularly acute. The FMR for a two-bedroom unit at $1970 is only 32.0% of the median income, making it a relatively affordable option for those earning close to the median income. However, for those relying solely on Section 8 vouchers, finding suitable housing can be challenging due to the limited number of units that fall within the FMR range. #### Investor Angle From an investor perspective, the ZIP code 60616 presents both opportunities and challenges. The actual rental market is much higher than the FMR, with a price-to-FMR ratio of 15.7x. This indicates that the market is highly inflated compared to what HUD deems fair. For a two-bedroom unit, the Zillow median price suggests a potential rental income of approximately $3,098 per month. At the FMR of $1970, the cash flow would be negative unless the investor can find ways to reduce expenses or increase rents. However, the tight market and high occupancy rate mean that there is a strong demand for rental properties, which could translate into steady occupancy rates and potentially higher rents over time. The investment grade for this ZIP code would be considered speculative due to the high price-to-FMR ratio and the challenges faced by voucher holders in finding suitable housing. #### Specific Actionable Insights 1. **Focus on Units Below FMR**: Investors should consider acquiring units that are priced below the FMR, particularly those that are slightly above but still within reach of voucher holders. For example, a two-bedroom unit priced at $2,200 per month could attract tenants who are willing to pay a bit more than the FMR but still within their budget. This strategy would help ensure steady occupancy and avoid the risk of having to offer deep discounts to attract tenants. 2. **Negotiate with Landlords**: Since the actual rental market is so much higher than the FMR, investors should focus on negotiating with landlords who are willing to accept lower rents. This could involve offering to manage multiple units or providing other incentives to landlords to make the deal more attractive. For instance, a landlord might agree to accept $2,100 per month for a two-bedroom unit instead of the Zillow median price, which would still be a profitable arrangement given the tight market conditions. 3. **Consider Multi-Family Properties**: Given the high renter population and the tight market, multi-family properties could be a good investment opportunity. These properties often have economies of scale that can help reduce overall expenses, making them more viable even at the FMR. Additionally, multi-family properties can provide a broader range of unit sizes, catering to different tenant needs and potentially attracting a mix of voucher holders and market-rate renters. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 60616 is to **Skip**. The high price-to-FMR ratio and the tight rental market make it difficult to achieve positive cash flow at the FMR levels. While there is strong demand for rental housing, the inflated market prices and the challenges faced by voucher holders in finding suitable housing suggest that this ZIP code is not ideal for investors looking to rely primarily on Section 8 vouchers. Instead, investors might want to explore other areas with a more favorable price-to-FMR ratio and a larger pool of units within the FMR range.

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.