Location: Little Rock-North Little Rock-Conway, AR | Metro: Hot Springs, AR MSA
Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,040 |
| 1 Bedroom | $1,050 |
| 2 Bedrooms | $1,300 |
| 3 Bedrooms | $1,690 |
| 4 Bedrooms | $1,950 |
| 5 Bedrooms | $2,262 |
| 6 Bedrooms | $2,533 |
| 7 Bedrooms | $2,736 |
| 8 Bedrooms | $2,873 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,300 | $177,568 | 0.73% | D |
| 3BR | $1,690 | $316,100 | 0.53% | F |
| 4BR | $1,950 | $497,124 | 0.39% | F |
U.S. Census Bureau data (2024)
The Section 8 thesis in ZIP code 71909, specifically within the context of Hot Springs Village, AR, revolves around the disparity between the Fair Market Rent (FMR) and the actual market rent. For fiscal year 2024, the FMR stands at $1370, while the Zillow Observed Rent Index (ZORI) indicates that the market rent is $1550. This creates a gap of $180, which translates to approximately a 13.1% difference.
Given that the FMR is lower than the market rent, landlords and small-portfolio investors should be aware of the potential costs associated with housing voucher tenants. The discrepancy means that landlords will receive a payment that is $180 less per month than what they could charge an open-market tenant. This reduction in rental income can impact the overall profitability of properties in the area.
In Hot Springs Village, where only 12.0% of residents are renters and the median home value is $305,697, the median income of $75,433 suggests that many homeowners might have higher financial stability compared to renters. This demographic characteristic further emphasizes the importance of understanding the financial implications of accepting Section 8 vouchers.
To illustrate the financial impact, consider a property with a market rent of $1550. If rented through the Section 8 program at $1370, the landlord would lose $180 monthly, or $2160 annually, compared to renting it at market rate. This cost must be weighed against the benefits of having a reliable source of income from the government and the security of having a tenant who is less likely to default on rent due to financial constraints.
Moreover, landlords need to factor in additional expenses such as administrative costs, potential delays in receiving payments, and the regulatory requirements that come with participating in the Section 8 program. These considerations can affect the net yield from properties in ZIP 71909.
Despite these challenges, the opportunity to participate in the Section 8 program can still present a viable investment strategy for those willing to navigate the system's intricacies. It provides a steady stream of tenants and a guaranteed income floor, even if it is below the market rate.
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.