Section 8 Fair Market Rent (FMR) for ZIP 63366 - 2027

Investment Score for ZIP 63366

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	$1,210
1 Bedroom	$1,260
2 Bedrooms	$1,540
3 Bedrooms	$1,980
4 Bedrooms	$2,280
5 Bedrooms	$2,645
6 Bedrooms	$2,962
7 Bedrooms	$3,199
8 Bedrooms	$3,359

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	$1,540	$266,827	0.58%	F
3BR	$1,980	$347,325	0.57%	F
4BR	$2,280	$448,994	0.51%	F
5BR	$2,645	$520,524	0.51%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 63366 (O'Fallon, MO) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) figures for ZIP code 63366 in O'Fallon, Missouri, for 2026 are as follows: - 0BR: $1090 - 1BR: $1140 - 2BR: $1390 (which is 16.6% of the median household income) - 3BR: $1790 - 4BR: $2070 These FMRs represent the maximum rent that a Section 8 voucher holder can pay. However, the actual rents in the area may exceed these figures, especially given the high price-to-FMR ratio of 15.8x for a 2BR property. This means that the actual market rent for a 2BR unit is approximately $263,098, which is significantly higher than the FMR of $1390. Consequently, voucher holders face significant constraints in finding affordable housing within their budget. #### Affordability & Renter Profile The population of O'Fallon is 54,769, with a median household income of $100,621. The renter percentage is relatively low at 17.9%, indicating that most residents are homeowners. The occupancy rate of 97.5% suggests that the rental market is quite tight, with very little vacancy. Given the high median income and low renter percentage, it is likely that renters in this area are typically middle-class individuals who might be young professionals, families, or those transitioning between homes. The affordability of housing for renters is a concern, particularly when considering the high price-to-FMR ratio. For instance, a 2BR unit priced at $263,098 would be unaffordable for many voucher holders, who are limited to paying only up to $1390 per month. This makes it challenging for voucher recipients to find suitable housing, as they must navigate a market where rents far exceed their allowable payment. #### Investor Angle From an investor perspective, the ZIP code 63366 presents a mixed picture. The FMRs provide a baseline for what voucher holders can afford, but the actual market rents are much higher. To determine if this ZIP code is cash-flow positive at FMR, we need to consider the typical rental prices and the potential for occupancy. Given the Zillow median price for a 2BR unit of $263,098 and the FMR of $1390, the difference is stark. If an investor were to purchase a 2BR unit at the median price and attempt to rent it out at the FMR, they would likely struggle to cover costs such as mortgage payments, property taxes, insurance, and maintenance. The high price-to-FMR ratio of 15.8x indicates that the market is overpriced relative to what voucher holders can afford. The investment grade for this ZIP code would be considered low due to the mismatch between FMR and actual market rents. Investors focusing on Section 8 vouchers would find it difficult to secure tenants willing to pay the FMR, as the market rents are so much higher. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors should focus on smaller units like 0BR or 1BR apartments. These units have lower FMRs ($1090 and $1140 respectively), making them more likely to attract voucher holders. Additionally, smaller units often have lower acquisition and maintenance costs, which could improve cash flow. 2. **Consider Location-Specific Strategies**: Within O'Fallon, there may be pockets where rents are closer to the FMR. Investors should conduct thorough local market research to identify areas with lower rents. This could involve targeting neighborhoods with older properties or areas that are less desirable but still within reasonable commuting distance to employment centers. 3. **Explore Non-Voucher Rental Opportunities**: Due to the tight rental market and high actual rents, investors might want to explore opportunities outside of Section 8 vouchers. This could include renting to non-voucher holders who are willing to pay the higher market rates, or converting some units into short-term rentals through platforms like Airbnb, which could potentially yield higher returns. #### Bottom Line For investors focused specifically on Section 8 vouchers, the recommendation for ZIP code 63366 is to **skip** this market. The high price-to-FMR ratio and tight rental market make it challenging to find properties that are both affordable and profitable. Instead, investors might want to look for areas with a higher renter percentage and a more balanced price-to-FMR ratio. Alternatively, they could diversify their investment strategy to include non-voucher rental opportunities or short-term rentals to maximize returns.

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.