Section 8 Fair Market Rent (FMR) for ZIP 80602 - 2027

Investment Score for ZIP 80602

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	$2,380
1 Bedroom	$2,490
2 Bedrooms	$2,950
3 Bedrooms	$3,870
4 Bedrooms	$4,330
5 Bedrooms	$5,023
6 Bedrooms	$5,626
7 Bedrooms	$6,076
8 Bedrooms	$6,380

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
2BR	$2,950	$473,134	0.62%	D
3BR	$3,870	$579,891	0.67%	D
4BR	$4,330	$662,615	0.65%	D
5BR	$5,023	$756,033	0.66%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 80602 (Thornton, CO) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 80602 is set by HUD for 2026, with the following figures: - 0BR: $2290 - 1BR: $2440 - 2BR: $2910 (which is 23.0% of the median household income) - 3BR: $3810 - 4BR: $4250 These FMRs represent the maximum amount that a Section 8 voucher holder can pay towards rent. However, the actual rental market in Thornton, CO, may differ significantly from these figures. Given the high median household income of $151,737, it is likely that rental prices exceed the FMR levels. For instance, the Zillow median price for a 2BR property is $479,335, which translates into a monthly mortgage payment far exceeding the FMR. This suggests that landlords might be reluctant to accept Section 8 vouchers due to the limited rent they can charge. Moreover, the occupancy rate of 99.0% indicates a very tight rental market, where there is little room for vacancy. This tightness could further exacerbate the issue for voucher holders, who may find it difficult to secure housing within the FMR limits. The high median household income also implies that many residents own their homes, with only 7.8% of the population being renters. This low percentage of renters means that the rental market is highly competitive, and landlords have the leverage to charge higher rents. #### Affordability & Renter Profile The median household income of $151,737 is quite high, suggesting that the area is predominantly affluent. The 2BR FMR of $2910 represents only 23.0% of the median income, indicating that the vast majority of residents can afford much higher rents. The Zillow median price for a 2BR property ($479,335) underscores the high cost of living in the area. Given the low renter percentage (7.8%) and the high occupancy rate (99.0%), the rental market is likely to be very tight. This means that the demand for rental properties is high relative to supply, making it challenging for renters, especially those relying on Section 8 vouchers, to find affordable housing. The high price-to-FMR ratio of 13.7x further emphasizes the disparity between actual rental prices and the FMRs set by HUD. #### Investor Angle From an investor's perspective, the ZIP code 80602 presents a challenging environment for cash flow-positive investments at the FMR levels. The Zillow median price for a 2BR property is $479,335, which would translate into a monthly mortgage payment well above the FMR. Even if we assume a conservative mortgage rate of 4.5%, a 2BR property would have a monthly mortgage payment of approximately $2,350 (based on a 30-year fixed-rate mortgage). This does not include other costs such as property taxes, insurance, and maintenance, which would push the total expenses even higher. Given the high median household income and the tight rental market, it is unlikely that landlords will be able to attract tenants willing to pay only the FMR. Therefore, the investment grade for this ZIP code is poor for Section 8-focused investors. The high cost of acquiring properties and the low potential for rental income at FMR levels make it a less attractive investment opportunity. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Since the FMR for 0BR and 1BR units is lower compared to larger units, investors might consider focusing on smaller units. For example, a 0BR unit has an FMR of $2290, while a 1BR unit has an FMR of $2440. These lower FMRs might provide better opportunities for cash flow, although the overall market remains tight. 2. **Consider Alternative Investment Strategies**: Given the high price-to-FMR ratio, investors should consider alternative strategies beyond traditional rental properties. For instance, converting properties to short-term rentals (e.g., Airbnb) or targeting a different demographic that can afford higher rents might be more profitable. 3. **Evaluate Property Value Increases**: With the median household income being so high, there is potential for property value appreciation over time. Investors might consider holding onto properties for long-term capital gains rather than focusing solely on rental income. #### Bottom Line For Section 8-focused investors, the ZIP code 80602 (Thornton, CO) is not a favorable market. The high price-to-FMR ratio, combined with the tight rental market and low percentage of renters, makes it difficult to achieve cash flow-positive investments at the FMR levels. Therefore, the recommendation is to **skip** this ZIP code for Section 8 investments and consider alternative markets with more favorable conditions. In summary, the high median household income and tight rental market in 80602 create significant challenges for Section 8 voucher holders and investors seeking to operate within FMR guidelines. The investment grade is poor, and the market dynamics suggest that this area is not suitable for Section 8-focused real estate 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.