Section 8 Fair Market Rent (FMR) for ZIP 72740 - 2027

FY 2027 Fair Market Rent Rates

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

Skeptical investors considering Huntsville, AR (ZIP 72740) for their Section 8 portfolio often raise several key concerns. Let's address these with the available data.

• Will FMR $840 (zip FY 2024) cover the mortgage on a $260,855 home? The Fair Market Rent (FMR) for ZIP 72740 in fiscal year 2024 is set at $840. To determine if this covers the mortgage, we need to calculate the monthly mortgage payment. Assuming a 30-year fixed-rate mortgage at an average interest rate of 4.5%, the monthly payment on a $260,855 home would be approximately $1,295. This means that the FMR of $840 will not fully cover the mortgage payment. Investors would need to supplement the income from other sources or accept a lower return on investment.
• Is there enough renter demand at 17.8%? The rental vacancy rate for ZIP 72740 is 17.8%. While this percentage indicates a relatively high vacancy rate, it does not necessarily mean there is insufficient demand. A higher vacancy rate can be beneficial as it suggests less competition among landlords and potentially more flexibility in terms of lease conditions. However, it also implies that landlords might have to work harder to fill vacancies. The data does not provide a direct measure of tenant demand, so while the vacancy rate is high, it's important to consider other factors such as job growth and population trends that could influence future demand.
• Will vouchers keep pace with $542 market rents? The average market rent in ZIP 72740 is $542. Given that the FMR is $840, it's reasonable to expect that voucher amounts will be closer to the FMR rather than the market rent. However, the exact amount of vouchers is not specified in the data. Historically, voucher amounts tend to lag behind market rents but are usually adjusted annually to reflect changes in the housing market. Therefore, it's likely that voucher holders will be able to afford homes renting at the average market rate of $542, but they may struggle with homes priced closer to the FMR. Landlords should monitor local HUD adjustments to ensure they remain competitive.

The data provides a clear picture of the financial landscape in ZIP 72740, highlighting both opportunities and challenges for landlords and small-portfolio investors. Despite the limitations in the data, the analysis offers valuable insights into the viability of investing in this area under the Section 8 program.

Data Sources: FMR data from HUD (2027). 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.