Section 8 Fair Market Rent (FMR) for ZIP 60638 - 2027

Investment Score for ZIP 60638

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	$283,973	0.64%	D
3BR	$2,350	$335,697	0.7%	D
4BR	$2,690	$397,741	0.68%	D
5BR	$3,120	$416,801	0.75%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 60638 (Chicago, IL) #### Section 8 Voucher Dynamics In ZIP code 60638, the Fair Market Rent (FMR) for a two-bedroom apartment is set at $1590 per month for 2026. This amount represents 21.0% of the median household income of $91,070. However, the actual rental market in this area is significantly higher. The Zillow median price for a two-bedroom property is $269,624, which translates to a monthly rent of approximately $14.1 times the FMR, or around $22,359 per month based on typical mortgage payments. This stark difference indicates that Section 8 voucher holders face significant constraints in finding affordable housing within the ZIP code. Most landlords would likely find it economically unfeasible to accept a voucher that only covers $1590 when the actual market rent is much higher. #### Affordability & Renter Profile The ZIP code has a population of 57,074, with 20.2% of residents being renters. Given the occupancy rate of 95.9%, this suggests a tight rental market where demand is high relative to supply. The median household income of $91,070 is relatively high, indicating that most residents can afford market-rate rents. However, the 20.2% who are renters may struggle to find housing that fits their budget, especially if they rely on Section 8 vouchers. With the FMR for a two-bedroom unit being only $1590, compared to the actual market rent of around $22,359, affordability is a major issue for low-income renters. #### Investor Angle From an investor’s perspective, the ZIP code appears to be a challenging environment for cash flow-positive investments at the FMR level. The FMR for a two-bedroom unit is $1590, while the actual market rent is estimated to be around $22,359. This means that properties rented at the FMR would generate significantly less revenue than what the market demands. Therefore, it is unlikely that investors would find the ZIP code financially viable for Section 8-focused investments. The investment grade for this ZIP code would be considered low due to the mismatch between FMR and actual market rents. Investors seeking stable returns would need to consider alternative strategies, such as targeting higher-income renters or exploring other ZIP codes with better alignment between FMR and market rates. #### Specific Actionable Insights 1. **Target Higher-Income Renters**: Given the high median household income and the tight rental market, investors should focus on renting to higher-income individuals rather than relying solely on Section 8 vouchers. This strategy would ensure better cash flow and potentially higher returns. 2. **Consider Short-Term Rentals**: The high price-to-FMR ratio suggests that short-term rentals could be a lucrative option. Platforms like Airbnb could provide a way to capitalize on the high demand for temporary accommodation without being constrained by the lower FMR. 3. **Develop Properties for Sale**: Instead of focusing on rental properties, investors might consider developing properties for sale. The median price for a two-bedroom home is $269,624, which is a substantial amount and could offer better financial returns through capital appreciation. #### Bottom Line Based on the provided data, the recommendation for Section 8-focused investors is to **skip** ZIP code 60638. The mismatch between FMR and actual market rents makes it difficult to achieve positive cash flow. Investors should look for areas with a closer alignment between FMR and market rates or consider alternative investment strategies that do not rely on Section 8 vouchers.

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.