Section 8 Fair Market Rent (FMR) for ZIP 84020 - 2027

Investment Score for ZIP 84020

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	$1,450
1 Bedroom	$1,610
2 Bedrooms	$1,920
3 Bedrooms	$2,560
4 Bedrooms	$2,920
5 Bedrooms	$3,387
6 Bedrooms	$3,793
7 Bedrooms	$4,096
8 Bedrooms	$4,301

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	$1,920	$445,919	0.43%	F
3BR	$2,560	$579,687	0.44%	F
4BR	$2,920	$812,134	0.36%	F
5BR	$3,387	$1,072,874	0.32%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 84020 (Draper, UT) #### Section 8 Voucher Dynamics In ZIP code 84020, the Fair Market Rent (FMR) for a two-bedroom apartment is set at $2,080 per month according to HUD's 2026 guidelines. However, the Zillow median price for a two-bedroom home in Draper, UT is $452,669, which translates to a monthly rent of approximately $2,080 based on a typical mortgage payment (assuming a 30-year fixed-rate mortgage at 4.5% interest). The price-to-FMR ratio for a two-bedroom unit is 18.1x, indicating that the market rent is significantly higher than the FMR. This suggests that Section 8 voucher holders face substantial constraints in finding affordable housing. The FMR is only 19.4% of the median household income of $128,910, meaning that the majority of residents can afford higher rents, but voucher holders are limited to properties within their subsidy range. #### Affordability & Renter Profile The population of Draper, UT is 50,278, with 31.4% of households being renters. Given the high median household income, it is likely that many renters have higher incomes and can afford market rates. However, the occupancy rate of 97.3% indicates a tight rental market with little vacancy. This means that there is strong demand for rental units, and those who cannot afford market rates may struggle to find suitable housing. The high income levels suggest that the area attracts professionals and families with good earning potential, but the significant gap between FMR and market rent implies that lower-income households may be priced out of the market. #### Investor Angle From an investor perspective, the ZIP code 84020 presents a mixed picture. While the median home value is high, the rental market is robust, and the occupancy rate is very high, indicating strong demand. However, the price-to-FMR ratio of 18.1x for a two-bedroom unit suggests that properties rented at FMR levels would not generate significant cash flow. For example, a property rented at $2,080 per month would need to be priced around $25,000 to achieve a reasonable cash-on-cash return, which is far below the market value of $452,669. Therefore, while the overall market is strong, the specific focus on Section 8 vouchers would likely result in low returns due to the disparity between FMR and market rents. #### Investment Grade Given the high median household income and the strong occupancy rate, the overall investment grade for the area is good. However, the specific focus on Section 8 vouchers would be challenging due to the low FMR relative to market rents. Investors seeking to capitalize on the strong rental market should consider targeting higher-end rentals or owner-occupied homes rather than relying solely on Section 8 vouchers. #### Specific Actionable Insights 1. **Target Higher-Rent Properties**: Given the high median household income and the strong demand for rental units, investors should consider acquiring properties that can command higher rents. A two-bedroom home priced at the Zillow median of $452,669 could potentially rent for over $2,080 per month, providing better cash flow and returns. 2. **Diversify Tenant Mix**: To mitigate the risk associated with relying solely on Section 8 vouchers, investors should aim to diversify their tenant mix. Including a combination of market-rate tenants and voucher holders can help stabilize cash flow and reduce dependency on government subsidies. 3. **Focus on Owner-Occupied Homes**: If the goal is to invest in the Draper, UT market, focusing on owner-occupied homes might provide better long-term returns. With median household income at $128,910, many residents can afford to purchase homes, making this a viable option for investors looking to enter the real estate market. #### Bottom Line For Section 8-focused investors, the recommendation is to **skip** ZIP code 84020 due to the low FMR relative to market rents. The tight rental market and high occupancy rate indicate strong demand, but the financial constraints imposed by FMR make it difficult to achieve positive cash flow. Investors should consider other areas with a closer alignment between FMR and market rents, or they should diversify their investment strategy to include higher-rent properties and owner-occupied homes.

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.