Section 8 Fair Market Rent (FMR) for ZIP 70433 - 2027

Investment Score for ZIP 70433

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	$1,140
1 Bedroom	$1,240
2 Bedrooms	$1,440
3 Bedrooms	$1,860
4 Bedrooms	$2,120
5 Bedrooms	$2,459
6 Bedrooms	$2,754
7 Bedrooms	$2,974
8 Bedrooms	$3,123

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
1BR	$1,240	$105,545	1.17%	B
2BR	$1,440	$183,741	0.78%	D
3BR	$1,860	$277,910	0.67%	D
4BR	$2,120	$476,642	0.44%	F
5BR	$2,459	$737,389	0.33%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 70433 (Covington, LA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 70433 in 2026 is set at $1520 for a two-bedroom unit, which represents 22.5% of the median household income of $81,241. This FMR is designed to reflect the average rent for a modest apartment in the area. However, it is important to understand how this compares to actual rents in the market. According to Zillow, the median price for a two-bedroom home in ZIP 70433 is $179,831. The price-to-FMR ratio is 9.9x, indicating that the median home price is significantly higher than the rent for a comparable unit. For voucher holders, this means that they are constrained by the FMR limits when seeking housing. If a landlord charges more than the FMR, the tenant must pay the difference out-of-pocket, which can be challenging given the income levels in the area. #### Affordability & Renter Profile In ZIP 70433, approximately 29.6% of households are renters, suggesting a substantial rental market. With a population of 41,876, this translates to roughly 12,385 renter households. The occupancy rate of 92.7% indicates that the rental market is relatively tight, with few vacant units available. Given the median household income of $81,241, the FMR for a two-bedroom unit at $1520 is a reasonable amount, representing about 22.5% of the median income. This suggests that the majority of residents who qualify for Section 8 vouchers would find it affordable to rent a two-bedroom unit without significant financial strain. However, the high price-to-FMR ratio of 9.9x implies that purchasing a home is much less affordable relative to renting, which could drive more people towards the rental market. #### Investor Angle From an investor perspective, the key question is whether the FMR provides a positive cash flow for rental properties. To determine this, we need to consider the typical expenses associated with owning and managing rental properties, including mortgage payments, property taxes, insurance, maintenance, and other operational costs. Assuming a conservative estimate of 75% of the FMR being used for mortgage payments, property taxes, and other fixed costs, a landlord could expect to net around $380 per month on a two-bedroom unit. This is calculated as follows: - FMR for 2BR: $1520 - Net income after 75% expenses: $1520 * 0.25 = $380 This net income needs to cover ongoing maintenance, utilities, and any other variable costs. Given the occupancy rate of 92.7%, the risk of vacancy is relatively low, which is favorable for investors. However, the high price-to-FMR ratio suggests that the purchase price of homes in the area is significantly higher than what the rental market can support, making it difficult to achieve positive cash flow through traditional ownership models. The investment grade for this ZIP code is moderate due to the tight rental market and the high cost of entry into homeownership. Investors looking to capitalize on Section 8 vouchers should focus on properties that can be rented at or below the FMR to ensure compliance and avoid the financial burden of covering the difference between the FMR and higher market rents. #### Specific Actionable Insights 1. **Focus on Properties Below FMR**: Investors should seek properties that can be rented at or below the FMR to maximize the number of eligible tenants. For example, a two-bedroom unit priced at $1520 or less would be fully covered by a Section 8 voucher, reducing the financial risk for landlords. 2. **Consider Multi-Family Units**: Given the high price-to-FMR ratio, single-family homes might not provide optimal cash flow. Multi-family units, such as duplexes or small apartment buildings, could offer better returns if they can be rented at rates close to the FMR. Additionally, larger units like three-bedroom and four-bedroom apartments have higher FMRs ($1940 and $2270 respectively), potentially providing more attractive rental income. 3. **Evaluate Property Management Costs**: Due to the high purchase price of homes relative to their rental value, investors should carefully evaluate the total cost of property management, including maintenance, utilities, and potential vacancy periods. Ensuring that these costs do not exceed the net income from the FMR is crucial for maintaining profitability. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP 70433 is to **Hold**. While the rental market is tight and there is demand for affordable housing, the high price-to-FMR ratio makes it challenging to achieve positive cash flow through traditional homeownership. Investors should carefully select properties that can be rented at or below the FMR and consider multi-family units to diversify their portfolio and potentially increase overall returns. However, the high upfront costs and the limited ability to raise rents above the FMR suggest that this ZIP code may not be ideal for new investments unless the investor has a clear strategy to manage costs effectively. --- This analysis provides a comprehensive overview of the rental market dynamics in ZIP 70433, focusing specifically on the implications for Section 8 voucher holders and investors. It highlights the challenges and opportunities present in the area, offering concrete insights based on the provided data.

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.