Location: Wichita, KS | Metro: Wichita, KS HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $810 |
| 1 Bedroom | $860 |
| 2 Bedrooms | $1,090 |
| 3 Bedrooms | $1,440 |
| 4 Bedrooms | $1,790 |
| 5 Bedrooms | $2,076 |
| 6 Bedrooms | $2,325 |
| 7 Bedrooms | $2,511 |
| 8 Bedrooms | $2,637 |
U.S. Census Bureau data (2024)
A skeptical investor looking into ZIP code 67016 might raise several concerns regarding the feasibility of investing in properties under the Section 8 program. Here's a detailed analysis addressing those concerns with the available data.
Objection 1: Will Fair Market Rent (FMR) of $1,170 cover the mortgage on a $182,521 home?
The Fair Market Rent (FMR) set for ZIP 67016 in fiscal year 2024 is $1,170. To determine if this will sufficiently cover the mortgage on a home priced at $182,521, we must consider the prevailing interest rates and typical loan terms. Assuming a standard 30-year fixed-rate mortgage with an average interest rate, the monthly payment for such a property would be approximately $750 to $850, depending on the exact interest rate. Therefore, the FMR of $1,170 is more than sufficient to cover the mortgage payment, leaving a margin for maintenance and other costs associated with property ownership.
Objection 2: Is there enough renter demand at 8.6%?
The rental vacancy rate for ZIP 67016 stands at 8.6%, which suggests that there is moderate demand for rental properties. An 8.6% vacancy rate means that 91.4% of rental units are occupied. While this rate is higher than some desirable markets, it still indicates a substantial portion of units being rented out. This occupancy level can support a portfolio of Section 8 properties, given that the program guarantees a steady stream of tenants. However, the data does not provide specifics on the number of applicants versus available units, which would give a clearer picture of the competition for housing. Nonetheless, the existing occupancy rate is encouraging for investors seeking to fill their properties.
Objection 3: Will vouchers keep pace with $1,094 market rents?
The current market rent for ZIP 67016 is reported at $1,094. The Section 8 voucher system aims to cover a significant portion of this amount, but the exact coverage depends on the household income and the specific rules governing voucher distribution in the area. The FMR of $1,170 provides a benchmark for what the government considers a reasonable rent in the area, suggesting that vouchers should generally keep up with market rents. However, the data does not specify the average voucher amount, so it's important for investors to verify the actual voucher payments for their specific units. Generally, the FMR figure indicates that the voucher system is designed to ensure that rent is affordable and reflective of local market conditions.
In conclusion, while the data offers valuable insights, some aspects require further investigation to fully address all investor concerns. The FMR is adequate to cover mortgage payments, and the rental vacancy rate shows a healthy demand for rental properties. Vouchers are expected to align with market rents, though precise amounts need verification.
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.