Section 8 Fair Market Rent (FMR) for ZIP 70506 - 2027

Investment Score for ZIP 70506

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	$890
1 Bedroom	$1,040
2 Bedrooms	$1,170
3 Bedrooms	$1,470
4 Bedrooms	$1,720
5 Bedrooms	$1,995
6 Bedrooms	$2,234
7 Bedrooms	$2,413
8 Bedrooms	$2,534

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
2BR	$1,170	$149,731	0.78%	D
3BR	$1,470	$218,666	0.67%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 70506 (Lafayette, LA) #### Section 8 Voucher Dynamics In ZIP code 70506, the Fair Market Rent (FMR) for a two-bedroom unit is set at $1,090 per month for 2026. This represents approximately 22.8% of the median household income of $57,379. However, the actual rents in the area can be significantly higher. The Zillow median price for a two-bedroom home is $150,295, which translates into a monthly rent that is about 11.5 times the FMR. Given this high price-to-FMR ratio, landlords who accept Section 8 vouchers are likely to face constraints in terms of the number of units they can offer at the FMR rate. For instance, if a landlord were to rent out a property at the Zillow median price, the monthly rent would be around $1,302, far exceeding the FMR of $1,090. This means that tenants with Section 8 vouchers might struggle to find affordable housing options within the ZIP code. #### Affordability & Renter Profile The ZIP code has a population of 42,318, with 50.4% of residents being renters. This indicates a significant rental market presence. The occupancy rate of 92.0% suggests that the rental market is relatively tight, with most available units being occupied. Given the median household income of $57,379, the affordability of housing is a critical issue for many residents. A two-bedroom unit at the FMR of $1,090 would consume a substantial portion of a typical household’s budget, leaving little room for other expenses. The high proportion of renters and the tight occupancy rate imply that there is strong demand for rental properties, particularly those that are affordable. #### Investor Angle From an investor perspective, the ZIP code offers mixed opportunities. While the high occupancy rate and strong demand for rental properties suggest potential profitability, the low FMR compared to market rates poses challenges. Accepting Section 8 vouchers could mean lower rental income, but it also ensures a steady stream of tenants due to the government subsidy. To determine whether the ZIP code is cash-flow positive at the FMR, we need to consider the costs associated with maintaining and managing rental properties. If the average cost of maintenance and management is below $1,090 for a two-bedroom unit, then accepting Section 8 vouchers could still be financially viable. However, given the high price-to-FMR ratio, it is likely that many landlords will prefer to rent at market rates rather than accept vouchers. #### Investment Grade The investment grade for this ZIP code can be assessed based on several factors. The high occupancy rate and significant renter population indicate a robust demand for rental properties. However, the high price-to-FMR ratio and the potential difficulty in finding affordable housing for voucher holders suggest that the market is somewhat challenging for Section 8-focused investors. The median household income of $57,379 also implies that there is a limit to how much residents can afford to pay in rent, even without vouchers. Therefore, while the ZIP code has potential, the investment grade would be moderate, reflecting both the strong demand and the financial constraints. #### Specific Actionable Insights 1. **Focus on Affordable Units**: Investors should focus on acquiring and renovating properties that can be rented out at or near the FMR. For example, a two-bedroom unit priced at $1,090 would be attractive to voucher holders and ensure a stable tenant base. This strategy would require careful consideration of acquisition costs and renovation expenses to ensure that the property remains profitable. 2. **Consider Multi-Family Properties**: Given the high occupancy rate and strong demand, multi-family properties could provide better returns. Investors should look for complexes where some units can be rented at market rates while others can be offered to voucher holders. This mixed approach could balance the financial risks and rewards, providing a more sustainable investment model. 3. **Engage with Local Housing Authorities**: Building relationships with local housing authorities can help secure a steady flow of voucher holders. This can be particularly beneficial in a tight rental market like 70506, where competition for tenants is fierce. By working closely with these authorities, investors can ensure that their properties remain occupied and generate consistent income. #### Bottom Line For Section 8-focused investors, the ZIP code 70506 presents a moderate investment opportunity. The strong demand for rental properties and the high occupancy rate make it a potentially profitable market. However, the high price-to-FMR ratio and the challenges associated with finding affordable housing for voucher holders suggest that investors should proceed with caution. A buy recommendation is appropriate for investors willing to focus on affordable units and engage with local housing authorities to secure a steady stream of tenants. Those looking for immediate high returns through market-rate rentals may want to hold or skip this ZIP code in favor of areas with a lower price-to-FMR ratio.

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.