Section 8 Fair Market Rent (FMR) for ZIP 63050 - 2027

FY 2027 Fair Market Rent Rates

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

Housing Authorities Serving ZIP 63050

• FRANKLIN COUNTY PUBLIC HOUSING AGENCY (Hillsboro, MO) - 1,211 Section 8 vouchers
• Housing Authority of the City of Festus (Festus, MO)

To decide whether to invest in ZIP 63050 (Hillsboro, MO) for Section 8 properties, follow these steps:

Step 1: Can the Fair Market Rent (FMR) of $1080 cover the debt service on a property valued at $315,200?

• Yes: If your debt service is less than or equal to $1080 per month, then the FMR can cover your costs. For example, if you finance the property at a rate that results in a monthly mortgage payment of $800, the FMR comfortably covers this amount.
• No: If your debt service exceeds $1080 per month, investing in this area based solely on Section 8 income would not be financially viable. For instance, a mortgage payment of $1200 would exceed the FMR.

Step 2: How does the market rent of $970 compare to the FMR?

• Above FMR: If the market rent is higher than $1080, you might consider renting to non-Section 8 tenants to maximize income. However, the FMR still provides a baseline for rental income.
• At or Below FMR: With a market rent of $970, which is below the FMR, there's potential to increase rents to the FMR level without being uncompetitive. This suggests that Section 8 tenants could pay a fair portion of the rent, especially if you aim to keep the total rent close to the FMR.

Step 3: Is the demand sufficient given 14.6% of residents are renters and the days on market (DOM) is not available?

• It Depends: The percentage of renters at 14.6% indicates a moderate level of demand. Without specific DOM data, we cannot determine how quickly properties are rented out. However, the fact that the market rent is below the FMR suggests some demand, as it may attract both Section 8 and non-Section 8 tenants who prefer lower rents. To make a final decision, consider other factors such as the vacancy rate, economic stability, and local policies affecting rental housing.

In summary, the viability of purchasing a property in ZIP 63050 for Section 8 investment hinges on your debt service requirements and the overall demand for rentals. If your debt service is covered by the FMR and the market rent is competitive, this area could be a good investment. However, without precise DOM data, demand remains uncertain, making further research necessary.

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.