Section 8 Fair Market Rent (FMR) for ZIP 72450 - 2027

Investment Score for ZIP 72450

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	$730
1 Bedroom	$800
2 Bedrooms	$960
3 Bedrooms	$1,320
4 Bedrooms	$1,600
5 Bedrooms	$1,856
6 Bedrooms	$2,079
7 Bedrooms	$2,245
8 Bedrooms	$2,357

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	$960	$109,433	0.88%	C
3BR	$1,320	$198,934	0.66%	D
4BR	$1,600	$264,264	0.61%	D
5BR	$1,856	$361,142	0.51%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 72450 (Paragould, AR) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 72450 is set by HUD for 2026, with the following figures: - 0BR: $670 - 1BR: $790 - 2BR: $930 (which represents 19.3% of the median household income) - 3BR: $1290 - 4BR: $1530 These FMRs are used to determine the maximum amount that Section 8 voucher holders can pay for rent. However, the actual rents in Paragould, AR, might differ significantly. According to Zillow, the median price for a 2BR home is $105,391. This translates into a price-to-FMR ratio of 9.4x, which indicates that the median home value is nearly nine times higher than the 2BR FMR. This suggests that actual rental prices could be much higher than the FMRs, creating significant constraints for voucher holders who must find housing within these limits. #### Affordability & Renter Profile In ZIP 72450, 35.9% of households are renters, indicating a substantial demand for rental properties. The occupancy rate stands at 93.0%, suggesting that the rental market is relatively tight. With a median household income of $57,725, the affordability of housing is a critical issue. For instance, a 2BR unit priced at $930 would consume almost 19.3% of the median income, which is already a considerable portion. If actual rents exceed the FMRs, the burden on low-income renters would be even greater. Given the high price-to-FMR ratio, it is likely that many rental units are priced above the FMRs, making it challenging for voucher holders to find suitable housing. The tight market conditions also suggest that there may be limited options available for those seeking affordable rentals. #### Investor Angle From an investor perspective, the ZIP code 72450 presents a mixed picture. The FMRs provide a baseline for rental pricing, but the actual market rents could be significantly higher due to the high price-to-FMR ratio. To assess whether this ZIP code is cash-flow positive at FMR, we need to consider the typical operating costs and potential vacancy rates. Assuming an average operating cost of 50% of the gross rent and a conservative vacancy rate of 5%, the net rent for a 2BR unit at $930 would be approximately $438.50 per month. This calculation is based on the following: - Gross Rent: $930 - Operating Costs: $930 * 50% = $465 - Vacancy Rate: $930 * 5% = $46.50 - Net Rent: $930 - $465 - $46.50 = $438.50 This net rent figure needs to cover mortgage payments, property taxes, insurance, and other expenses. Given the median home value of $105,391, the potential for cash flow positivity depends on the financing terms and other local economic factors. Investment grade for this ZIP code can be assessed by looking at the demand for rental properties and the overall market conditions. With a 93.0% occupancy rate, there is strong demand, but the high price-to-FMR ratio indicates that many units may not be affordable for low-income renters. Therefore, the investment grade would be moderate, as there is a balance between strong demand and the challenges posed by affordability. #### Specific Actionable Insights 1. **Focus on Affordable Units**: Investors should focus on developing or acquiring properties that are priced close to the FMRs. For example, a 2BR unit priced at $930 would be ideal for Section 8 voucher holders. This strategy would ensure a steady stream of tenants and avoid the risk of non-payment due to unaffordable rents. 2. **Consider Location-Specific Factors**: While the overall market appears tight, investors should look for areas within Paragould where rental prices are closer to the FMRs. This could involve neighborhoods with lower property values or areas with less competition from higher-priced rentals. 3. **Engage with Local Housing Authorities**: Building relationships with local housing authorities can help secure a steady supply of Section 8 tenants. These authorities often have waiting lists and can facilitate tenant placement in properties that meet their criteria. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 72450 is to **Hold**. The tight market conditions and high demand for rental properties make it a viable location, but the high price-to-FMR ratio poses significant challenges for affordability. Investors should carefully select properties that align with FMR guidelines to ensure they remain attractive to voucher holders while maintaining profitability.

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.