Location: Colorado Springs, CO | Metro: Colorado Springs, CO HUD Metro FMR Area
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 | $990 |
| 1 Bedroom | $1,210 |
| 2 Bedrooms | $1,420 |
| 3 Bedrooms | $1,970 |
| 4 Bedrooms | $2,250 |
| 5 Bedrooms | $2,610 |
| 6 Bedrooms | $2,923 |
| 7 Bedrooms | $3,157 |
| 8 Bedrooms | $3,315 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,210 | $264,801 | 0.46% | F |
| 2BR | $1,420 | $333,112 | 0.43% | F |
| 3BR | $1,970 | $453,626 | 0.43% | F |
| 4BR | $2,250 | $597,287 | 0.38% | F |
| 5BR | $2,610 | $768,879 | 0.34% | F |
U.S. Census Bureau data (2024)
The Section 8 thesis in ZIP code 80904, located in Colorado Springs, CO, revolves around the discrepancy between the Fair Market Rent (FMR) and the actual market rent. For fiscal year 2024, the FMR stands at $1480, while the market rent, measured by the Zillow Rent Index (ZORI), is $1488. This creates a gap of $8, representing a mere 0.54% difference.
In this scenario where the FMR is slightly lower than the market rent, landlords who accept housing vouchers must be aware of the costs associated with renting below open-market rates. The primary challenge here is the potential delay in receiving rent payments due to administrative processes involved with Section 8 vouchers. However, the financial impact of this minor gap is minimal compared to the stability and security that voucher tenants can provide.
Colorado Springs has a significant rental population, with 43.7% of residents being renters. The median home value in the area is $441,088, and the median income is $69,814. Given these figures, landlords should consider the broader economic context. While accepting Section 8 tenants might mean a slight reduction in immediate rental income, it can also open up opportunities to serve a segment of the population that might otherwise struggle to find affordable housing.
The stability of voucher tenants can be particularly appealing in an environment where the median income is relatively low. It ensures a consistent stream of rental income, which is crucial for maintaining cash flow and covering operational costs. Additionally, the slight disparity between FMR and market rent does not significantly affect the overall yield, making it a viable strategy for landlords and small-portfolio investors in the region.
To summarize, the gap between FMR and market rent in ZIP 80904 is negligible. Landlords should weigh the benefits of stable tenancy against the minor financial impact of accepting Section 8 vouchers. In the context of Colorado Springs, this can be a strategic move to support the local community while maintaining a steady income.
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.