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 | $980 |
| 1 Bedroom | $1,090 |
| 2 Bedrooms | $1,300 |
| 3 Bedrooms | $1,800 |
| 4 Bedrooms | $2,170 |
| 5 Bedrooms | $2,517 |
| 6 Bedrooms | $2,819 |
| 7 Bedrooms | $3,045 |
| 8 Bedrooms | $3,197 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,300 | $257,461 | 0.5% | F |
| 3BR | $1,800 | $294,167 | 0.61% | D |
| 4BR | $2,170 | $387,536 | 0.56% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 72774, located in West Fork, Arkansas, provides a detailed insight into the potential returns for landlords and small-portfolio investors. The Fair Market Rent (FMR) for a 2-bedroom apartment in this area for fiscal year 2024 is set at $1190 per month, while the market rent based on Census ACS data stands at $1,208 per month.
To annualize these figures, we multiply them by 12 months. This gives us an annualized FMR of $14,280 and an annualized market rent of $14,496. With the median home value in the area at $303,075, we can calculate the implied gross yield for both scenarios. For the FMR scenario, the gross yield is approximately 4.71%, calculated as $14,280 divided by $303,075. In the case of market rent, the gross yield slightly increases to 4.78%.
The difference between these two yields is minimal, indicating that the Section 8 program offers rental rates that are very close to market rates in ZIP 72774. Given the low renter density of 14.7%, it's important to note that the demand for rentals might be lower compared to other areas. However, the N/A-day DOM (days on market) suggests that when properties do become available, they are likely to be rented quickly, which supports the use of either the FMR or market rent in yield calculations.
In conclusion, the gross yields derived from both the FMR and market rent are nearly identical, making either figure a reliable benchmark for investment decisions. Considering the specific context of ZIP 72774, the FMR of $1190 per month provides a solid, if conservative, estimate of potential income. Landlords should factor in the lower overall renter population when considering long-term occupancy rates, but the quick turnover indicated by the N/A-day DOM supports a positive outlook for Section 8 investments in this area.
The choice between using FMR or market rent should be made based on individual property conditions and the specific needs of the landlord. Both figures suggest a stable and modest return, with the market rent offering a marginal increase over the FMR. For most investors, the FMR scenario is more realistic due to the lower renter density, although the market rent scenario should not be discounted entirely.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). 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.