Section 8 Fair Market Rent (FMR) for ZIP 63026 - 2027

Investment Score for ZIP 63026

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	$1,090
1 Bedroom	$1,130
2 Bedrooms	$1,380
3 Bedrooms	$1,770
4 Bedrooms	$2,040
5 Bedrooms	$2,366
6 Bedrooms	$2,650
7 Bedrooms	$2,862
8 Bedrooms	$3,005

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	$1,380	$222,432	0.62%	D
3BR	$1,770	$322,469	0.55%	F
4BR	$2,040	$460,084	0.44%	F
5BR	$2,366	$563,615	0.42%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

Market Analysis for ZIP Code 63026 (Fenton, MO) Introduction: The following market analysis focuses on ZIP code 63026, located in Fenton, Missouri, within Jefferson County. The analysis will cover Section 8 voucher dynamics, affordability and renter profile, investor angle, actionable insights, and a bottom line recommendation for Section 8-focused investors. Section 8 Voucher Dynamics: The Fair Market Rent (FMR) for ZIP 63026 is set by HUD for 2026 as follows: - 0BR: $960 - 1BR: $1000 - 2BR: $1220 (which represents 15.0% of the median household income) - 3BR: $1570 - 4BR: $1810 These figures represent the maximum amount that a Section 8 voucher holder can pay towards rent. However, the actual rents in the area can be significantly higher. For instance, the Zillow median price for a 2BR property is $220,036. This suggests that the rental market is likely priced above the FMR levels. Given the price-to-FMR ratio of 15.0x, it is clear that the actual rents are much higher than the FMRs, which could pose significant challenges for voucher holders seeking affordable housing. Constraints for voucher holders include the fact that landlords are not obligated to accept Section 8 vouchers, and the limited availability of units that fall within the FMR guidelines. Additionally, the high cost of living relative to the FMR may limit the number of units available to voucher holders, making it difficult for them to find suitable housing. Affordability & Renter Profile: The population of ZIP 63026 is 45,354, with 19.7% being renters. The occupancy rate stands at 94.9%, indicating a relatively tight market where most available units are occupied. The median household income is $97,553, which is considerably higher than the FMR for a 2BR unit ($1220). This implies that the majority of residents can afford higher rents, leading to a competitive rental market. Given that only 15.0% of the median income is required for a 2BR unit, the market appears to favor those who can afford higher rents. The tight occupancy rate suggests that there is little oversupply, and competition for units is strong. This makes it challenging for low-income households to secure affordable housing, especially when they rely on Section 8 vouchers. Investor Angle: From an investor perspective, the ZIP code offers potential opportunities but also significant challenges. The price-to-FMR ratio of 15.0x indicates that properties are highly overpriced compared to the FMR levels. This means that landlords who wish to participate in the Section 8 program must ensure their rents do not exceed the FMR limits, which could result in lower cash flow compared to market rates. To determine if this ZIP code is cash-flow positive at FMR, we need to consider the typical rental income versus expenses. Assuming a 2BR unit is rented at the FMR of $1220 per month, the annual rental income would be $14,640. If we consider average expenses such as mortgage payments, maintenance, and utilities, it is likely that the net cash flow would be negative or barely positive at these rates. Investment grade for this ZIP code would be considered moderate to low due to the high property values and the limited number of units that fall within the FMR guidelines. Investors should carefully evaluate the potential for long-term appreciation and the ability to attract tenants willing to use Section 8 vouchers. Actionable Insights: 1. **Focus on Units Below FMR**: Investors should focus on acquiring units that are priced below the FMR levels. For example, a 2BR unit priced at $1100 per month would be more attractive to voucher holders and potentially offer better occupancy rates. This would require identifying undervalued properties or negotiating lower purchase prices. 2. **Consider Multi-Family Properties**: Given the high property values, multi-family properties might offer a better return on investment. A two-unit building with each unit priced at $1220 would generate $29,280 annually, which could offset the higher costs associated with larger properties. 3. **Engage with Local Housing Authorities**: Building relationships with local housing authorities can help landlords secure more Section 8 tenants. This involves understanding the process and requirements for accepting vouchers and ensuring compliance with HUD regulations. Bottom Line Recommendation: For Section 8-focused investors, the recommendation for ZIP 63026 is to **Skip**. The high property values and the limited number of units that fall within the FMR guidelines make it challenging to achieve positive cash flow. Additionally, the tight rental market and high occupancy rate suggest that there is limited opportunity for securing tenants who rely solely on Section 8 vouchers. However, investors who are willing to diversify their tenant base and consider a mix of market-rate and voucher tenants might find some opportunities. They should focus on properties that are priced slightly below the FMR to attract a broader range of tenants and ensure better occupancy rates. In conclusion, while the ZIP code offers a robust economy and high median income, the challenges posed by the high property values and limited availability of affordable units make it less favorable for pure Section 8 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.