Section 8 Fair Market Rent (FMR) for ZIP 65201 - 2027

Investment Score for ZIP 65201

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	$770
1 Bedroom	$980
2 Bedrooms	$1,100
3 Bedrooms	$1,490
4 Bedrooms	$1,710
5 Bedrooms	$1,984
6 Bedrooms	$2,222
7 Bedrooms	$2,400
8 Bedrooms	$2,520

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
1BR	$980	$182,542	0.54%	F
2BR	$1,100	$187,862	0.59%	F
3BR	$1,490	$311,072	0.48%	F
4BR	$1,710	$439,192	0.39%	F
5BR	$1,984	$659,147	0.3%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 65201 (Columbia, MO) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 65201 in Columbia, Missouri, is set by HUD for 2026. For a two-bedroom apartment, the FMR is $1160. This amount represents 28.9% of the median household income in the area, which stands at $48,113. However, it is important to note that the actual rental market price for a two-bedroom unit is significantly higher, with Zillow reporting a median price of $184,575. The price-to-FMR ratio is 13.3x, indicating that the actual market rent for a two-bedroom unit is approximately $15,000 per year ($1250 per month), which is well above the FMR. This means that Section 8 voucher holders face significant constraints when trying to find housing that fits within their budget. While the voucher covers up to $1160 per month for a two-bedroom unit, landlords might be reluctant to accept vouchers due to the high discrepancy between the FMR and the actual market rent. As a result, voucher holders often have limited options and may struggle to secure housing that meets their needs. #### Affordability & Renter Profile ZIP code 65201 has a population of 50,011, with a substantial 67.8% of residents being renters. This indicates a strong demand for rental properties in the area. The occupancy rate is also high at 91.5%, suggesting that the market is relatively tight, with few vacant units available. Given the median household income of $48,113, many residents likely rely on assistance programs like Section 8 to afford housing. The high percentage of renters and the tight occupancy rate point to a competitive rental market where affordability is a key concern. The median income is relatively low compared to the high cost of housing, making it difficult for many residents to find affordable options without assistance. #### Investor Angle From an investor’s perspective, the ZIP code 65201 presents a mixed picture. The actual market rent for a two-bedroom unit is $1250 per month, while the FMR is $1160. This means that investors who can secure tenants through Section 8 vouchers will see a slight reduction in potential monthly rental income. However, the high demand for rental properties and the tight occupancy rate suggest that there is still a strong market for rentals. To determine if this ZIP code is cash-flow positive at FMR, we need to consider the costs associated with owning and maintaining rental properties. Assuming a typical vacancy rate of around 5% and maintenance costs of about 10% of the gross rental income, the net effective rent would be lower than the gross rent. For example, for a two-bedroom unit, the net effective rent would be: \[ \text{Gross Rent} = \$1160 \] \[ \text{Vacancy Cost} = 5\% \times \$1160 = \$58 \] \[ \text{Maintenance Cost} = 10\% \times \$1160 = \$116 \] \[ \text{Net Effective Rent} = \$1160 - (\$58 + \$116) = \$986 \] Given the high median home value of $184,575, the mortgage payment for a property purchased at this price would depend on the interest rate and loan terms. Assuming a 30-year fixed-rate mortgage with an interest rate of 5%, the monthly principal and interest payment would be approximately $965. This suggests that an investor could potentially break even or make a small profit, but the margin would be slim. In terms of investment grade, the high rent-to-income ratio and the tight market conditions indicate that the ZIP code 65201 is moderately attractive for investors. However, the reliance on Section 8 vouchers and the associated administrative burden might reduce the appeal for some investors. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors should focus on smaller units such as one-bedroom or studio apartments. The FMR for a one-bedroom unit is $1010, which is closer to the actual market rent. This could provide better cash flow and a higher likelihood of finding tenants willing to pay the market rate. 2. **Consider Location-Specific Strategies**: The ZIP code 65201 is likely influenced by the presence of the University of Missouri, which attracts students and young professionals. Investors could target areas near campus or other high-demand locations, where the rental market is even tighter. Additionally, offering amenities such as parking, laundry facilities, or modern finishes could help attract tenants willing to pay slightly above the FMR. #### Bottom Line For Section 8-focused investors, the ZIP code 65201 presents a challenging environment due to the high price-to-FMR ratio and the limited number of units that fit within the FMR guidelines. While the overall rental market is tight and competitive, the high cost of housing relative to the median income makes it difficult to find properties that are both affordable and profitable. **Recommendation**: Skip this ZIP code for now unless you can find properties in the lower end of the market, such as one-bedroom units, which may offer better alignment with the FMR and thus more favorable cash flow. The current market dynamics suggest that the ZIP code is not ideal for Section 8-focused investments, but it could be worth revisiting if the FMR increases or if there are changes in the local rental market.

Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.