Section 8 Fair Market Rent (FMR) for ZIP 62253 - 2027

FY 2027 Fair Market Rent Rates

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

To determine if a landlord should buy in ZIP code 62253 for Section 8 purposes, follow this decision tree based on the provided data:

1) Does FMR ($900) clear debt service on a $111,580 property?

• Yes. The Fair Market Rent (FMR) of $900 is sufficient to cover the debt service on a property valued at $111,580. This means that the rental income generated from a Section 8 tenant will be enough to meet the mortgage payments and other financial obligations associated with owning the property. Therefore, you can proceed to the next question.
• No. If the FMR does not clear the debt service on a $111,580 property, then purchasing in this ZIP code would not be advisable for Section 8 investments. The rental income would fall short of covering the necessary expenses, leading to financial losses.

2) Is market rent ($647) above, at, or below FMR?

• Above. If the market rent exceeds the FMR, this indicates that landlords could potentially earn more from market-rate tenants than from Section 8 tenants. However, given that the FMR already clears the debt service, this would still be a viable investment, albeit with a preference for market-rate tenants over Section 8.
• At. If the market rent equals the FMR, there is no financial advantage in renting to market-rate tenants over Section 8 tenants. Given that the FMR covers the debt service, this ZIP code remains a suitable investment for Section 8 properties.
• Below. If the market rent is below the FMR, Section 8 tenants become even more attractive financially. Since the FMR already meets the debt service requirements, landlords should consider this ZIP code as a good opportunity for Section 8 investments.

3) Are 22.6% renters + N/A-day DOM enough demand?

• It depends. With 22.6% of the population being renters, there is a moderate level of demand for rental properties. However, the lack of data on days on market (DOM) makes it challenging to assess how quickly properties are rented out. If the DOM is relatively low, indicating quick turnover, then the demand is likely sufficient to support a Section 8 investment. Conversely, if the DOM is high, it suggests a slower rental market, which could make it harder to find tenants promptly.

In conclusion, if the FMR of $900 clears the debt service on a $111,580 property and the market rent is either at or below the FMR, then ZIP code 62253 is a viable location for Section 8 investments. The moderate renter percentage supports this decision, though the absence of DOM data introduces an element of uncertainty. Landlords must consider the specifics of their financial situation and the local rental market dynamics to make a fully informed decision.

Data Sources: FMR data from HUD (2027). 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.