Section 8 Fair Market Rent (FMR) for ZIP 80127 - 2027

Investment Score for ZIP 80127

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	$1,990
1 Bedroom	$2,090
2 Bedrooms	$2,470
3 Bedrooms	$3,240
4 Bedrooms	$3,620
5 Bedrooms	$4,199
6 Bedrooms	$4,703
7 Bedrooms	$5,079
8 Bedrooms	$5,333

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	$2,090	$274,691	0.76%	D
2BR	$2,470	$404,620	0.61%	D
3BR	$3,240	$598,551	0.54%	F
4BR	$3,620	$740,314	0.49%	F
5BR	$4,199	$958,747	0.44%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 80127 (Dakota Ridge, CO) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 80127 in 2026 is set at $2400 for a two-bedroom unit. However, the actual rent for a two-bedroom unit based on Zillow’s median price is $422,314, which translates to a monthly rental cost of approximately $1760 if we assume a typical mortgage payment includes principal, interest, taxes, and insurance (PITI). This calculation is derived by dividing the median home value by 240, which is a common rule of thumb for estimating monthly rental costs from home values. Despite the lower estimated monthly rental cost, the price-to-FMR ratio of 14.7x indicates that the actual rental market is significantly higher than the FMR. For Section 8 voucher holders, this means that they will face significant constraints in finding suitable housing. The voucher amount of $2400 would likely not cover the actual market rent for a two-bedroom unit, leaving a substantial gap between what voucher holders can afford and what landlords might charge. #### Affordability & Renter Profile ZIP code 80127 has a median household income of $137,040, which places it in a relatively high-income bracket. The renter percentage is 14.1%, indicating that most residents in Dakota Ridge own their homes. With a 97.6% occupancy rate, the market is quite tight, suggesting that there is little excess supply of rental units. Given the high median income and low renter percentage, those who do rent in this area are likely to be well-off individuals or families who can afford the high rents. The fact that the FMR for a two-bedroom unit represents only 21.0% of the median income further underscores the affordability challenges faced by lower-income renters. The tight market conditions make it difficult for voucher holders to find affordable housing, as the majority of available units are priced well above the FMR. #### Investor Angle From an investor perspective, the ZIP code 80127 is not particularly cash-flow positive at the FMR levels. Given the high median home value and the tight rental market, landlords would need to charge much more than the FMR to achieve positive cash flow. The Zillow median price of $422,314 for a two-bedroom unit suggests that the actual rental rates are around $1760 per month, but this is far below the market rate, which is likely much higher. The investment grade for this ZIP code is relatively low for Section 8-focused investors due to the significant gap between the FMR and the actual market rent. Additionally, the limited number of renters and the high competition for rental properties mean that landlords may struggle to fill vacancies with Section 8 tenants, especially given the stringent requirements and potential delays associated with the program. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors should consider focusing on smaller units such as one-bedroom apartments, where the FMR is $2010. Although still a challenge, the gap between FMR and market rent is less pronounced for smaller units, making them more viable options for positive cash flow. 2. **Target Affordable Housing Projects**: Investors looking to capitalize on the needs of lower-income renters could consider developing or acquiring properties specifically designated as affordable housing. These projects often receive government subsidies and tax incentives that can help bridge the gap between FMR and market rents. 3. **Consider Alternative Rental Programs**: Instead of relying solely on Section 8 vouchers, investors might want to explore other rental assistance programs that offer higher subsidy levels. This could include state-specific housing assistance programs or private initiatives that provide additional financial support to tenants. #### Bottom Line For investors focused on Section 8 vouchers, the recommendation for ZIP code 80127 is to **skip** this market. The high price-to-FMR ratio and the tight rental market make it challenging to achieve positive cash flow with Section 8 tenants. Additionally, the limited number of renters and the high competition for rental properties suggest that there are better opportunities elsewhere for Section 8-focused investments.

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.