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 | $1,690 |
| 1 Bedroom | $2,070 |
| 2 Bedrooms | $2,430 |
| 3 Bedrooms | $3,360 |
| 4 Bedrooms | $3,860 |
| 5 Bedrooms | $4,478 |
| 6 Bedrooms | $5,015 |
| 7 Bedrooms | $5,416 |
| 8 Bedrooms | $5,687 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $3,360 | $449,696 | 0.75% | D |
| 4BR | $3,860 | $541,379 | 0.71% | D |
| 5BR | $4,478 | $603,780 | 0.74% | D |
U.S. Census Bureau data (2024)
To determine if a landlord should invest in ZIP 80927 for Section 8 properties, follow this decision tree based on the provided data:
1) Does FMR ($2,600) clear debt service on a $501,885 property?
Yes. If the Fair Market Rent (FMR) of $2,600 is sufficient to cover the mortgage payments and other expenses associated with owning a property valued at $501,885, then the investment is financially viable. This means that the landlord can expect to break even or make a profit on the rental income.
No. If the FMR does not cover the debt service, then purchasing a property in ZIP 80927 would result in financial losses. The landlord should consider other areas where the FMR is higher relative to property values.
It Depends. If the FMR is close to covering the debt service but not entirely, the landlord must assess additional factors such as potential tax benefits, appreciation of property value, and the overall cost of ownership. These factors could influence whether the investment is worthwhile despite the marginal coverage.
2) Is market rent ($1,978 ZORI) above, at, or below FMR?
Above. If the market rent exceeds the FMR, landlords can potentially earn higher income from non-Section 8 tenants. However, they must ensure that the majority of their units can still be rented at the FMR rate for Section 8 tenants.
At or Below. If the market rent is equal to or lower than the FMR, the landlord's income will closely align with the Section 8 payment standards. This scenario is more favorable for landlords who intend to exclusively rent to Section 8 tenants.
3) Are 8.4% renters + 43-day DOM enough demand?
Yes. With 8.4% of the population being renters and an average Days on Market (DOM) of 43 days, there is sufficient demand to fill vacancies quickly. This indicates a stable rental market where landlords can expect steady occupancy rates.
No. If the percentage of renters is low and the DOM is high, landlords might struggle to find tenants promptly. This could lead to prolonged vacancy periods and reduced income.
It Depends. If the percentage of renters is marginal and the DOM is slightly above average, the landlord should consider the local job market, population growth trends, and competition. A growing job market and increasing population could improve demand over time.
In conclusion, landlords should evaluate whether the FMR of $2,600 can support the debt service on a $501,885 property, compare the ZORI ($1,978) to the FMR, and assess the rental demand in ZIP 80927 before making a purchase decision for Section 8 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.