Section 8 Fair Market Rent (FMR) for ZIP 65202 - 2027

Investment Score for ZIP 65202

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	$990
2 Bedrooms	$1,110
3 Bedrooms	$1,510
4 Bedrooms	$1,730
5 Bedrooms	$2,007
6 Bedrooms	$2,248
7 Bedrooms	$2,428
8 Bedrooms	$2,549

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	$990	$146,771	0.67%	D
2BR	$1,110	$183,846	0.6%	D
3BR	$1,510	$271,328	0.56%	F
4BR	$1,730	$333,930	0.52%	F
5BR	$2,007	$389,558	0.52%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 65202 (Columbia, MO) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 65202 is set by HUD for 2026 as follows: - 0BR: $820 - 1BR: $1040 - 2BR: $1190 (which is 19.8% of the median household income) - 3BR: $1610 - 4BR: $1910 To understand how these FMRs compare to actual rents, we need to consider the typical rent prices in the area. The FMRs represent the maximum amount that a Section 8 voucher holder can be expected to pay for rent, which is based on the 40th percentile of local rental costs. However, actual rents can vary widely, and it’s important to note that many landlords may charge above these FMRs. For instance, the Zillow median price for a 2BR property is $178,535, which suggests that the average rent could be higher than the FMRs. Given the occupancy rate of 94.3%, there is a high demand for rental properties in this area, which means that actual rents might exceed the FMRs. This creates a constraint for voucher holders who may find it difficult to secure housing if landlords are charging more than the FMRs. In such cases, voucher holders would have to cover the difference out-of-pocket, which could be challenging given their limited financial resources. #### Affordability & Renter Profile The population of ZIP 65202 is 47,327, with 36.8% being renters. This indicates a significant portion of the population relies on rental housing, making it a crucial part of the local economy. The median household income is $72,289, and the FMR for a 2BR unit is $1190, which is 19.8% of the median income. This suggests that renting a 2BR unit is relatively affordable for the average household in the area, but it still represents a substantial portion of their income. The tight market conditions, evidenced by the high occupancy rate, mean that there is likely a shortage of affordable units. This makes it challenging for low-income households to find suitable housing, especially those relying on Section 8 vouchers. Given the high demand and limited supply, landlords may have less incentive to accept vouchers, preferring to rent to tenants who can pay the full market rate. #### Investor Angle From an investor perspective, the key question is whether properties can generate positive cash flow at the FMR levels. The price-to-FMR ratio for a 2BR unit is 12.5x, meaning that the median home price ($178,535) is 12.5 times the FMR for a 2BR unit ($1190). This ratio is quite high, indicating that the cost of acquiring a property is significantly higher than the rent it can command under the Section 8 program. To determine if this ZIP code is cash-flow positive at FMR, we need to consider the typical expenses associated with owning a rental property. These include mortgage payments, property taxes, insurance, maintenance, and other operational costs. Assuming a conservative estimate of 1% of the purchase price for annual maintenance and repairs, along with a 1.5% property tax rate, the total annual expenses for a 2BR unit priced at $178,535 would be approximately: - Annual Maintenance: $1,785 - Property Taxes: $2,678 - Insurance: $1,000 (estimated) - Other Costs: $1,000 (estimated) Total annual expenses: $6,463 If the rent is capped at $1190 per month, the annual rent income would be $14,280. Subtracting the total annual expenses from the annual rent income gives us a net cash flow of $7,817 per year, which is positive but thin considering the high acquisition cost relative to the rent. In terms of investment grade, the high price-to-FMR ratio suggests that this ZIP code may not be ideal for investors looking to maximize returns through cash flow alone. However, the strong demand for rental properties and the high occupancy rate indicate that there is a stable tenant base, which could provide some security for long-term investments. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investing in smaller units like 0BR or 1BR apartments might offer better cash flow opportunities. The FMR for a 1BR unit is $1040, which is lower than the 2BR FMR but still represents a significant portion of the median income. This could make it easier for voucher holders to afford, increasing the likelihood of securing a tenant. 2. **Consider Location and Amenities**: While the overall market may be tight, certain locations within ZIP 65202 might offer better opportunities for positive cash flow. Properties near universities, hospitals, or other employment centers could command slightly higher rents without exceeding the FMR too much. Additionally, offering amenities such as parking, laundry facilities, or modern appliances could help attract tenants willing to pay closer to the FMR. 3. **Engage with Local Real Estate Agents**: To get a clearer picture of the local rental market, engaging with local real estate agents can provide valuable insights into which types of properties are most in demand and where the best deals can be found. They can also advise on strategies for working with Section 8 tenants and landlords. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP 65202 is to **Hold**. While the market is tight and there is a high demand for rental properties, the high price-to-FMR ratio makes it challenging to achieve strong cash flow returns. Investing in smaller units or strategically located properties could improve the situation, but the overall environment is not particularly favorable for maximizing short-term profits. Long-term stability and potential appreciation in property values might make holding onto properties a reasonable strategy, but investors should be prepared for thinner margins compared to areas with lower price-to-FMR ratios.

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.