Location: Little Rock-North Little Rock-Conway, AR | Metro: Little Rock-North Little Rock-Conway, AR HUD Metro FMR Area
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 | $910 |
| 1 Bedroom | $920 |
| 2 Bedrooms | $1,060 |
| 3 Bedrooms | $1,420 |
| 4 Bedrooms | $1,710 |
| 5 Bedrooms | $1,984 |
| 6 Bedrooms | $2,222 |
| 7 Bedrooms | $2,400 |
| 8 Bedrooms | $2,520 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,060 | $222,280 | 0.48% | F |
| 3BR | $1,420 | $352,388 | 0.4% | F |
| 4BR | $1,710 | $776,525 | 0.22% | F |
| 5BR | $1,984 | $1,070,539 | 0.19% | F |
U.S. Census Bureau data (2024)
The Section 8 thesis in ZIP code 72207, located in Little Rock, AR, is centered around the discrepancy between the Fair Market Rent (FMR) and the actual market rent. The FMR for the area, as set for fiscal year 2024, stands at $1120, while the market rent, represented by the Zillow Observed Rent Index (ZORI), is $1562. This creates a significant gap of $442, which translates to approximately 39.4% below the market rate.
In Little Rock, where 31.5% of residents are renters and the median home value is $397,816, landlords must understand the implications of this gap. The median income in the area is $96,343, indicating that many residents rely on rental assistance programs like Section 8 to afford housing. Given the market conditions, accepting Section 8 tenants means renting your property at a rate that is $442 less than the market average, which can affect your cash flow and investment returns.
Landlords and small-portfolio investors should be aware of the financial dynamics involved. While the FMR is lower than the market rent, it does not mean that the investment is necessarily less profitable. However, it does imply that landlords will have to manage their expenses carefully to maintain a positive yield. The cost of housing voucher tenants below open-market rates can be mitigated by understanding the local rental market, the reliability of Section 8 payments, and the potential for longer-term tenancy stability.
Moreover, the analysis should consider the broader economic context of Little Rock. With a median home value significantly higher than the median income, there is a strong demand for affordable housing options. Section 8 properties provide a solution for this demand, ensuring that they remain in high demand among tenants who qualify for the program. Therefore, while the immediate rental income might be lower, the long-term stability and security of tenancy can offer a steady and reliable yield.
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.