Section 8 Fair Market Rent (FMR) for ZIP 80918 - 2027

Investment Score for ZIP 80918

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	$1,200
1 Bedroom	$1,460
2 Bedrooms	$1,720
3 Bedrooms	$2,380
4 Bedrooms	$2,730
5 Bedrooms	$3,167
6 Bedrooms	$3,547
7 Bedrooms	$3,831
8 Bedrooms	$4,023

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	$1,460	$173,920	0.84%	C
2BR	$1,720	$286,242	0.6%	D
3BR	$2,380	$402,308	0.59%	F
4BR	$2,730	$452,569	0.6%	D
5BR	$3,167	$522,022	0.61%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 80918 (Colorado Springs, CO) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 80918 in Colorado Springs is set by HUD for 2026. For a two-bedroom unit, the FMR is $1790. This represents 24.5% of the median household income in the area, which is $87,685. The FMRs for other bedroom types are as follows: - 0BR: $1230 - 1BR: $1510 - 3BR: $2490 - 4BR: $2830 To understand how these FMRs compare to actual rents, we need to consider the occupancy rate and renter percentage. With an occupancy rate of 96.3%, the market is relatively tight, meaning that there is a high demand for rental units. Additionally, 35.8% of households are renters, indicating a significant portion of the population relies on rental housing. Given the high occupancy rate and the fact that many residents are renters, it is likely that actual rents are close to or even above the FMRs. However, voucher holders are constrained by the FMRs, which means they can only afford units up to the specified rent levels. In a tight market like 80918, this could pose challenges for voucher holders who might struggle to find units within their budget. #### Affordability & Renter Profile The median household income in 80918 is $87,685, which suggests that the area has a relatively affluent population. However, the 35.8% renter percentage indicates that a significant number of people are still renting, possibly due to the high cost of homeownership. The Zillow median price for a two-bedroom home is $298,517, which is quite high compared to the median income. This implies that homeownership is less affordable for many residents, pushing them towards the rental market. The price-to-FMR ratio for a two-bedroom unit is 13.9x, which is very high. This means that the median price of a home is significantly higher than the rent for a similar-sized unit. This disparity can make it difficult for renters to save enough money to purchase a home, further entrenching the rental market. Given the high occupancy rate and the significant proportion of renters, it is clear that the rental market is tight. This tightness can lead to upward pressure on rents, making it challenging for lower-income households to find affordable units. #### Investor Angle From an investor perspective, the key question is whether the ZIP code is cash-flow positive at the FMR. To determine this, we need to consider the rental income versus the costs of owning and maintaining the property. For a two-bedroom unit, the FMR is $1790 per month. If we assume typical expenses such as mortgage payments, property taxes, insurance, maintenance, and management fees, we can estimate the net operating income (NOI). Let's break down the potential costs: - Mortgage Payment: Assuming a 30-year fixed-rate mortgage at 5% interest, the monthly payment for a $298,517 home would be approximately $1590. - Property Taxes: Based on an average tax rate of 1.2%, the annual property tax would be around $3582, or $298.50 per month. - Insurance: A reasonable estimate for homeowner’s insurance would be $100 per month. - Maintenance & Management Fees: These typically range from 10% to 20% of the rental income. At 15%, this would be about $268.50 per month. Adding these together, the total monthly expenses would be approximately $2257 ($1590 + $298.50 + $100 + $268.50). Since the FMR is $1790, this would result in a negative cash flow of $467 per month. Therefore, properties in this ZIP code are not cash-flow positive at the FMR. In terms of investment grade, the high price-to-FMR ratio and the negative cash flow suggest that this is a speculative investment rather than a conservative one. Investors should be prepared for long-term holding periods and potential challenges in finding tenants willing to pay the FMR. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high costs associated with larger units, investors should consider focusing on smaller units such as 0BR and 1BR apartments. The FMR for a 0BR unit is $1230, and for a 1BR unit, it is $1510. These units are more likely to generate positive cash flow when considering typical ownership costs. 2. **Consider Alternative Financing Options**: Traditional financing might not be feasible given the negative cash flow. Investors should explore alternative financing options such as hard money loans, private lending, or creative lease-to-own arrangements to reduce upfront capital requirements and improve cash flow. #### Bottom Line Based on the provided data, the recommendation for Section 8-focused investors in ZIP code 80918 is to **Skip** this market. The high price-to-FMR ratio and negative cash flow indicate that the area is not financially viable for investors seeking immediate positive cash flow. While the market is tight and there is a strong demand for rental units, the financial constraints make it a challenging environment for Section 8 investments. Investors should look for areas with better alignment between FMRs and actual rents, and where the price-to-FMR ratio is more favorable.

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.