Section 8 Fair Market Rent (FMR) for ZIP 72401 - 2027

Investment Score for ZIP 72401

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	$860
1 Bedroom	$860
2 Bedrooms	$1,040
3 Bedrooms	$1,370
4 Bedrooms	$1,380
5 Bedrooms	$1,601
6 Bedrooms	$1,793
7 Bedrooms	$1,936
8 Bedrooms	$2,033

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	$1,040	$121,751	0.85%	C
3BR	$1,370	$194,349	0.7%	D
4BR	$1,380	$268,545	0.51%	F
5BR	$1,601	$407,116	0.39%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

Market Analysis for ZIP Code 72401 (Jonesboro, AR) 1. Section 8 Voucher Dynamics The Fair Market Rent (FMR) figures for ZIP code 72401 indicate that a two-bedroom rental unit should cost around $1000 per month. However, the Zillow median price for a two-bedroom home is $117,808, which suggests that the actual rent prices could be significantly higher. The price-to-FMR ratio of 9.8x implies that the actual rental prices are much higher than the FMR, potentially making it difficult for Section 8 voucher holders to find suitable housing. For example, a three-bedroom unit has an FMR of $1350, but the actual rent might be closer to $13,230 based on the ratio, which is far beyond the $1350 limit set by the voucher program. This means that voucher holders face strict constraints in finding affordable housing within their budget. 2. Affordability & Renter Profile With a population of 42,602 and a median household income of $45,329, Jonesboro has a significant portion of renters at 51.1%. Given that the FMR for a two-bedroom unit is $1000, which represents 26.5% of the median income, it indicates that renting is relatively affordable for the average resident. However, the high price-to-FMR ratio suggests that the market is tight, and many units may be priced well above the FMR. This tight market makes it challenging for low-income renters to find affordable housing, especially those relying on Section 8 vouchers. 3. Investor Angle From an investor perspective, the ZIP code 72401 can be analyzed for cash flow potential using the FMR. If we consider the FMR for a two-bedroom unit at $1000, this would be the maximum allowable rent for a property to qualify under the Section 8 program. Given the high price-to-FMR ratio, properties purchased at the median price of $117,808 would likely generate a monthly rent much higher than $1000 if rented outside the Section 8 program. However, for Section 8-focused investors, the cash flow would be limited to the FMR levels. To determine the investment grade, we need to look at the occupancy rate and the demand for rental units. With an occupancy rate of 89.9%, the market is relatively strong, indicating a good demand for rental properties. This suggests that there is a reasonable chance of maintaining steady occupancy rates, even if the rents are capped at FMR levels. 4. Specific Actionable Insights - **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors should focus on smaller units such as one-bedroom or studio apartments. The FMR for a one-bedroom unit is $840, which is lower than the median price for a two-bedroom unit. This allows for better cash flow management within the constraints of the Section 8 program. - **Target Low-Income Neighborhoods**: Since the median household income is $45,329, targeting neighborhoods where the average income is closer to this figure can help ensure that the units are more likely to be occupied by Section 8 voucher holders. This strategy aligns with the high percentage of renters and the affordability of FMR-based rents. - **Consider Renovation Projects**: Investing in properties that require renovations can be a strategic move. By purchasing below the median price and renovating to meet modern standards, you can increase the likelihood of securing tenants who are willing to pay the FMR. For instance, a property purchased for $100,000 and renovated for $20,000 could still offer competitive value in a tight market. 5. Bottom Line Based on the analysis, the recommendation for Section 8-focused investors in ZIP code 72401 is to **Buy**. The strong occupancy rate and high percentage of renters make this a viable market. However, investors must be prepared to manage cash flow effectively by focusing on smaller units and targeting low-income neighborhoods. The high price-to-FMR ratio presents challenges, but these can be mitigated through strategic investments and renovations. In conclusion, while the market is tight and actual rents are significantly higher than the FMR, the demand for affordable housing and the favorable occupancy rate make ZIP code 72401 a promising area for Section 8-focused real estate investments.

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.