Section 8 Fair Market Rent (FMR) for ZIP 70508 - 2027

Investment Score for ZIP 70508

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	$990
1 Bedroom	$1,150
2 Bedrooms	$1,290
3 Bedrooms	$1,620
4 Bedrooms	$1,900
5 Bedrooms	$2,204
6 Bedrooms	$2,468
7 Bedrooms	$2,665
8 Bedrooms	$2,798

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
2BR	$1,290	$188,353	0.68%	D
3BR	$1,620	$261,748	0.62%	D
4BR	$1,900	$416,984	0.46%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 70508 (Lafayette, LA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 70508, as of 2026, is set at $1220 for a two-bedroom unit. This represents 17.0% of the median household income in the area, which is $86,005. However, the actual rental prices can be significantly higher. The Zillow median price for a two-bedroom home in this ZIP code is $188,884, which translates to a monthly mortgage payment of approximately $1,450 based on a typical 4.5% interest rate and a 30-year fixed mortgage. Given that the price-to-FMR ratio is 12.9x, it indicates that the actual rental prices are much higher than the FMR. This means that tenants with Section 8 vouchers face significant constraints in finding suitable housing within the allowable rent limits. Landlords must either accept lower rents or find ways to subsidize the difference between the FMR and the market rent to attract voucher holders. #### Affordability & Renter Profile ZIP code 70508 has a population of 40,592, with 38.1% being renters. This suggests a substantial demand for rental properties in the area. The occupancy rate of 90.7% indicates that the market is relatively tight, with most available units occupied. The median household income of $86,005 suggests that many residents have the financial capacity to afford higher rents, but a significant portion of the population relies on affordable housing options. For those who are renting, the high price-to-FMR ratio implies that affordability is a major concern, especially for low-income households. Given the high proportion of renters and the tight occupancy rate, there is likely a competitive market for rental properties, particularly for those that fall within the FMR range. #### Investor Angle From an investor perspective, the ZIP code 70508 presents both opportunities and challenges. The high price-to-FMR ratio of 12.9x indicates that the market rent for properties far exceeds the FMR. For example, a two-bedroom unit with a Zillow median price of $188,884 would generate a monthly mortgage payment of about $1,450, which is well above the FMR of $1220. This makes it difficult for landlords to achieve positive cash flow when renting to voucher holders without additional subsidies or creative financing strategies. However, the high occupancy rate and significant demand for rental properties suggest that there could still be potential for investors who are willing to work within the constraints of the Section 8 program. To determine the investment grade, we need to consider factors such as the local economic conditions, job market stability, and the overall demand for affordable housing. With a median household income of $86,005, the area is generally stable, but the high proportion of renters indicates a strong need for affordable housing solutions. #### 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, where the FMR is lower. For instance, the FMR for a one-bedroom unit is $1070, which is closer to the actual market rent for smaller units. This could help in achieving better cash flow while still participating in the Section 8 program. 2. **Consider Subsidies and Partnerships**: Investors might want to explore partnerships with local government agencies or non-profit organizations that provide additional subsidies to make up the difference between the FMR and the market rent. This can help in securing tenants with Section 8 vouchers and maintaining profitability. 3. **Evaluate Property Value**: Before investing, carefully evaluate the property value and ensure that it aligns with the FMR. For example, a two-bedroom unit priced at $188,884 would be challenging to manage under the Section 8 program due to the high mortgage payments. Investing in properties that are valued closer to the FMR would be more feasible. #### Bottom Line Given the high price-to-FMR ratio and the tight rental market, the recommendation for Section 8-focused investors in ZIP code 70508 is to **Skip** this market unless they are willing to invest in smaller units or properties with lower values that align more closely with the FMR. The current dynamics make it challenging to achieve positive cash flow without additional subsidies or creative financing strategies. Therefore, unless investors can secure these additional resources, the market is not ideal for Section 8 investments.

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.