Location: Fayetteville-Springdale-Rogers, AR | Metro: Fayetteville-Springdale-Rogers, 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 | $1,090 |
| 1 Bedroom | $1,250 |
| 2 Bedrooms | $1,490 |
| 3 Bedrooms | $2,060 |
| 4 Bedrooms | $2,490 |
| 5 Bedrooms | $2,888 |
| 6 Bedrooms | $3,235 |
| 7 Bedrooms | $3,494 |
| 8 Bedrooms | $3,669 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $2,060 | $348,403 | 0.59% | F |
| 4BR | $2,490 | $513,490 | 0.48% | F |
| 5BR | $2,888 | $794,251 | 0.36% | F |
U.S. Census Bureau data (2024)
A skeptical investor looking at ZIP 72713 might have several concerns regarding the feasibility of offering rental properties through the Section 8 program. Let's address these points head-on.
Will the Fair Market Rent (FMR) of $1210 cover the mortgage on a $454,885 home?
The FMR of $1210 for ZIP 72713 in fiscal year 2024 is significantly lower than what would typically be required to service a mortgage on a home priced at $454,885. To provide a clearer perspective, let’s consider an average mortgage rate. Assuming a fixed-rate mortgage of 4.5%, the monthly payment on a $454,885 loan over 30 years would be approximately $2276. This amount far exceeds the FMR, indicating that relying solely on Section 8 payments would likely result in a financial shortfall for covering the mortgage. Therefore, it is essential for investors to either seek additional sources of income or consider homes with lower purchase prices to ensure profitability.
Is there enough renter demand at 48.3%?
The 48.3% occupancy rate suggests that there is moderate demand for rental properties in ZIP 72713. However, this figure alone does not fully capture the dynamics of the rental market. A deeper analysis of the local housing stock and tenant preferences is necessary. For instance, if the majority of the existing rentals are priced above the FMR, there could be unmet demand for affordable housing. Conversely, if there is a surplus of low-cost rentals, competition for tenants could be fierce. The data provided does not give us a complete picture of the market conditions, but it does indicate that there is room for improvement in terms of meeting the needs of renters seeking affordable options.
Will vouchers keep pace with market rents of $1,599?
The market rent of $1,599 in ZIP 72713 is notably higher than the FMR of $1210. This discrepancy raises questions about whether the voucher amounts will adjust accordingly to match the rising market rates. Historically, voucher increases have lagged behind market rent growth, which could pose a challenge for landlords. While the Housing Choice Voucher Program aims to cover a significant portion of the market rent, it is crucial to monitor any updates from the Department of Housing and Urban Development (HUD) regarding potential adjustments to the voucher amounts. In the meantime, landlords should be prepared for the possibility of receiving less than the full market rent.
In conclusion, while ZIP 72713 presents some challenges for landlords participating in the Section 8 program, understanding the specific issues can help guide informed investment decisions. Careful consideration of property pricing, market demand, and voucher trends is necessary to navigate this complex landscape successfully.
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.