Section 8 Fair Market Rent (FMR) for ZIP 70605 - 2027

Investment Score for ZIP 70605

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	$1,120
1 Bedroom	$1,130
2 Bedrooms	$1,480
3 Bedrooms	$1,760
4 Bedrooms	$2,060
5 Bedrooms	$2,390
6 Bedrooms	$2,677
7 Bedrooms	$2,891
8 Bedrooms	$3,036

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	$1,480	$158,232	0.94%	C
3BR	$1,760	$239,837	0.73%	D
4BR	$2,060	$377,049	0.55%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 70605 (Lake Charles, LA) #### Section 8 Voucher Dynamics In ZIP code 70605, the Fair Market Rent (FMR) for a two-bedroom apartment is set at $1520 per month for 2026. This represents approximately 21.2% of the median household income of $86,015, which indicates that it is within the affordability range for many residents. However, the actual rental market price for a two-bedroom unit is significantly higher, with Zillow reporting a median price of $154,929 for homes, translating to a monthly rent of around $1,291 if we assume a typical mortgage payment-to-rent conversion rate. The price-to-FMR ratio of 8.5x suggests that the actual market rent is much higher than the FMR, making it challenging for Section 8 voucher holders to find suitable housing within their budget. Specifically, a voucher holder would struggle to find a two-bedroom apartment renting at $1,291 when the FMR is only $1520. #### Affordability & Renter Profile The population of ZIP code 70605 is 40,482, with 27.7% being renters. This means there are approximately 11,220 renters in the area. The occupancy rate stands at 86.5%, indicating a relatively tight market where most available units are occupied. Given the high price-to-FMR ratio, the market appears to be undersupplied with affordable housing options, especially for those relying on Section 8 vouchers. The median household income of $86,015 suggests that the majority of residents can afford higher rents, but the 27.7% who are renters might face significant challenges in finding affordable housing. #### Investor Angle From an investor perspective, the ZIP code 70605 offers mixed opportunities. The FMR for a two-bedroom apartment is $1520, but the actual market rent is closer to $1,291 based on Zillow’s reported median home value. If we consider the typical rental yield and expenses, an investor aiming to achieve a positive cash flow would need to ensure that operating costs, including maintenance, property management, and financing, do not exceed the rental income. Assuming a conservative estimate of 30% of the rental income going towards these costs, the net cash flow would be around $903 per month for a two-bedroom unit. This is below the FMR, suggesting that while the market rent is higher, achieving a positive cash flow solely based on FMR might be difficult. The investment grade for this ZIP code can be considered moderate due to the tight rental market and the high price-to-FMR ratio. Investors should carefully evaluate the potential for long-term appreciation and the stability of rental demand before committing capital. #### Specific Actionable Insights 1. **Focus on Units Below FMR**: Investors should seek out properties that are priced below the FMR to attract Section 8 voucher holders. For example, a two-bedroom unit priced at $1,400 could still be attractive to voucher holders, even though it is slightly above the FMR, given the high market rent. This pricing strategy can help bridge the gap between market rates and FMR, ensuring both affordability and profitability. 2. **Consider Multi-Family Properties**: Given the high occupancy rate and the percentage of renters, multi-family properties may offer better returns. A building with multiple units can spread fixed costs like property taxes and insurance over several rental incomes, potentially improving overall cash flow. Additionally, multi-family properties often have higher turnover rates, which can be advantageous in a tight rental market. 3. **Long-Term Rental Strategy**: Given the high price-to-FMR ratio, investors should consider a long-term rental strategy rather than short-term flipping. The current market dynamics suggest that there is a strong demand for rental properties, and maintaining a portfolio of rental units can provide steady income over time. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 70605 is to **Hold**. While the market presents challenges due to the high price-to-FMR ratio, the strong rental demand and moderate investment grade make it a viable option for those willing to navigate the complexities. Investors should focus on units priced just below the FMR to maximize their chances of attracting voucher holders while maintaining profitability. Additionally, considering multi-family properties and adopting a long-term rental strategy can enhance the overall investment performance.

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.