Section 8 Fair Market Rent (FMR) for ZIP 72906 - 2027

FY 2027 Fair Market Rent Rates

The analysis for ZIP code 72906 in Unknown, Arkansas, reveals some limitations due to incomplete data. However, we can still provide a basic understanding of the potential rental income dynamics when considering Section 8 housing.

The Fair Market Rent (FMR) for a two-bedroom apartment in ZIP 72906 for fiscal year 2024 is set at an annualized rate of $900. This figure represents the government's benchmark for determining the maximum rent subsidy that a landlord can receive through the Section 8 program. It is important to note that this amount is typically lower than the market rent, which is currently listed as N/A for this area.

To derive the implied gross yield, we need to compare the FMR to the median home value, which is also listed as N/A for ZIP 72906. Without a specific median home value, we cannot calculate an exact gross yield. However, if we were to assume a typical median home value for a similar rural area, the gross yield would likely be low compared to what landlords might expect from market rents.

The renter density in ZIP 72906 is listed as N/A%, and the days on market (DOM) is also N/A. These figures are critical in understanding the demand for rental properties and the speed at which they are leased. Given these unknowns, it is difficult to predict how quickly a property could be filled with a Section 8 tenant, but it is generally understood that the process can be slower compared to non-subsidized rentals.

In terms of realism, the scenario based on the FMR of $900 is less attractive for most landlords and small-portfolio investors, especially without knowing the market rent. The gross yield from Section 8 would be lower because the rent received is fixed and often below market rates. Landlords should consider the stability of rental income versus the potential for higher yields from market-rate rentals.

Despite the lack of specific market rent figures, it is reasonable to infer that market rates would be higher than the $900 FMR, leading to a potentially higher gross yield. Therefore, while Section 8 can offer a stable source of income, it may not be the optimal choice for maximizing returns in ZIP 72906 unless other factors such as reduced vacancy risk or ease of management outweigh the financial considerations.

Data Sources: FMR data from HUD (2027).

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.