Section 8 Fair Market Rent (FMR) for ZIP 80123 - 2027

Investment Score for ZIP 80123

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	$2,030
1 Bedroom	$2,120
2 Bedrooms	$2,510
3 Bedrooms	$3,290
4 Bedrooms	$3,680
5 Bedrooms	$4,269
6 Bedrooms	$4,781
7 Bedrooms	$5,163
8 Bedrooms	$5,421

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
1BR	$2,120	$253,602	0.84%	C
2BR	$2,510	$380,878	0.66%	D
3BR	$3,290	$565,679	0.58%	F
4BR	$3,680	$718,830	0.51%	F
5BR	$4,269	$946,106	0.45%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 80123 (Littleton, CO) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 80123 in Littleton, Colorado, is set by HUD for 2026. For a two-bedroom apartment, the FMR is $2400. However, the actual rental market in this area is significantly higher. According to Zillow, the median price for a two-bedroom home in this ZIP code is $393,536, which translates to a monthly rent of approximately $1640 if we assume a 5% annual rental yield. This means that the actual rental market is about 13.7 times the FMR for a two-bedroom unit, indicating that the actual rents are much higher than the FMR. Given the high disparity between the FMR and actual rents, Section 8 voucher holders face significant constraints. The voucher amount of $2400 would cover only a small portion of the actual rent, making it challenging for them to find suitable housing in this market. They would likely need to look for properties below the median price or outside the typical rental range for the area. #### Affordability & Renter Profile ZIP code 80123 has a population of 44,549, with 27.2% being renters. The occupancy rate is quite high at 96.6%, suggesting a tight rental market. With a median household income of $105,932, the majority of residents can afford the higher-than-average rents. However, the 27.2% of renters who rely on their income to cover housing costs might struggle, especially those who are low-income and depend on assistance like Section 8 vouchers. The affordability gap is stark when comparing the FMR to the actual rental prices. A two-bedroom apartment's FMR of $2400 represents just 27.2% of the median household income, meaning that even without considering other expenses, a significant portion of the income goes towards rent. This makes the market particularly challenging for low-income renters who might be eligible for Section 8 vouchers but still find it difficult to secure housing due to the limited supply of affordable units. #### Investor Angle From an investor perspective, the ZIP code 80123 presents both opportunities and challenges. The high price-to-FMR ratio suggests that the market is overpriced relative to what HUD considers fair. However, given the strong demand and high occupancy rates, there could still be potential for cash flow positive investments if the right strategy is employed. To determine if this ZIP code is cash-flow positive at FMR, we must consider the typical rental yields and expenses. Assuming a median home price of $393,536 and a 5% rental yield, the expected monthly rent would be around $1640. This is significantly lower than the FMR of $2400, implying that landlords who set rents based on FMR could potentially achieve positive cash flow, especially if they manage to keep operating costs low. However, the investment grade in this market is mixed. While there is a strong demand for rentals, the high cost of entry and the limited number of units that qualify for Section 8 vouchers make it a challenging environment for investors looking to exclusively cater to this demographic. Investors might need to consider a broader range of tenants to ensure profitability. #### Specific Actionable Insights 1. **Focus on Affordable Units**: Investors should focus on acquiring properties that are priced below the median, ideally closer to the FMR. For example, a two-bedroom property priced at $280,000 would generate a monthly rent of approximately $1167, which is well below the FMR of $2400. This would allow for better alignment with Section 8 voucher amounts and provide a buffer against rising operating costs. 2. **Consider Mixed-Income Properties**: Given the high median income in the area, investors might want to consider developing or purchasing properties that cater to a mix of income levels. This could include offering some units at FMR rates while pricing others higher to attract middle-income tenants. This approach could help balance the financial risks associated with relying solely on Section 8 vouchers. 3. **Maximize Property Utilization**: With an occupancy rate of 96.6%, maximizing the utilization of available units is crucial. Investors should ensure that their properties are well-maintained and marketed effectively to attract tenants quickly. Additionally, understanding the local rental market dynamics and adjusting rents accordingly can help maintain occupancy levels and cash flow. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 80123 is to **Skip**. The high price-to-FMR ratio and the limited number of units that can realistically be rented out at FMR levels make it a challenging market to enter profitably. While there are opportunities for cash flow positive investments, these are largely dependent on finding properties below the median price and managing operating costs effectively. Given the strong competition and high demand for rentals, it may be more advantageous to explore markets where the FMR aligns more closely with actual rental prices, providing a better fit for Section 8 voucher holders and more straightforward investment opportunities.

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.