Section 8 Fair Market Rent (FMR) for ZIP 84118 - 2027

Investment Score for ZIP 84118

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	$1,380
1 Bedroom	$1,550
2 Bedrooms	$1,860
3 Bedrooms	$2,480
4 Bedrooms	$2,830
5 Bedrooms	$3,283
6 Bedrooms	$3,677
7 Bedrooms	$3,971
8 Bedrooms	$4,170

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
2BR	$1,860	$400,468	0.46%	F
3BR	$2,480	$425,556	0.58%	F
4BR	$2,830	$459,080	0.62%	D
5BR	$3,283	$493,739	0.66%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 84118 (Kearns, UT) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 84118, as defined by HUD for 2026, is $2,060 for a two-bedroom unit. This figure represents 27.3% of the median household income in Kearns, which stands at $90,562. However, the actual rent for a two-bedroom unit, based on Zillow’s median price, is $399,565. This translates to a price-to-FMR ratio of 16.2x, indicating that actual rental prices are significantly higher than the FMR. For Section 8 voucher holders, this means that the maximum rent they can afford is only a fraction of what landlords are charging. The disparity between FMR and actual rents constrains voucher holders to a limited pool of properties that accept Section 8 vouchers and fall below the FMR threshold. #### Affordability & Renter Profile In ZIP code 84118, the renter population comprises 15.7% of the total population, which is 42,853. This equates to approximately 6,734 renters. Given the occupancy rate of 98.2%, it suggests that the rental market is relatively tight, with very few vacant units available. The high price-to-FMR ratio indicates that the rental market is not particularly affordable for low-income families who rely on Section 8 vouchers. The median household income is quite robust at $90,562, but this does not necessarily mean that all residents can afford the high rental prices. The affordability gap is significant, especially for those who are eligible for Section 8 assistance. #### Investor Angle From an investor perspective, the ZIP code 84118 presents a mixed picture. While the median Zillow price for a two-bedroom unit is $399,565, the FMR of $2,060 is the benchmark for Section 8 voucher holders. To determine if this ZIP code is cash-flow positive at FMR, we need to consider the typical rental yields and expenses associated with owning rental property. Assuming a conservative rental yield of 5% (which is common in many markets), the annual rental income would be $24,720 ($2,060 x 12 months). This is significantly lower than the potential income from renting at market rates, which could be around $48,000 annually ($399,565 / 8.33 years, assuming a 12% cap rate). However, the investment grade of a property in this ZIP code depends on several factors, including the cost of acquisition, maintenance, and vacancy rates. With a high occupancy rate of 98.2%, the risk of vacancy is minimal. But the challenge lies in finding properties that can be rented out at or below the FMR. Given the high price-to-FMR ratio, it is likely that most properties in this area will not be cash-flow positive at FMR levels unless they are purchased at a substantial discount or have very low operating costs. #### Specific Actionable Insights 1. **Focus on Lower-Rent Properties**: Investors should focus on acquiring properties that are priced closer to the FMR levels. For instance, a two-bedroom unit priced at $2,060 or slightly above would be more attractive to Section 8 voucher holders. This might involve looking for older or less desirable properties that still meet the basic living standards required by Section 8. 2. **Consider Multi-Family Units**: Since the FMR for larger units (like three-bedroom and four-bedroom) is also high, investors might find better opportunities in multi-family units where they can spread the fixed costs across multiple units. A three-bedroom unit with an FMR of $2,750 would provide a higher monthly income compared to a two-bedroom unit, potentially making the investment more viable. 3. **Engage with Local Real Estate Agents**: Local real estate agents can provide valuable insights into the rental market dynamics and help identify properties that are more likely to be rented out at FMR levels. They can also facilitate communication with potential tenants who use Section 8 vouchers. #### Bottom Line Given the high price-to-FMR ratio and the tight rental market, the recommendation for Section 8-focused investors in ZIP code 84118 is to **Skip**. The current rental prices far exceed the FMR, making it challenging to find properties that are both affordable for voucher holders and profitable for investors. Unless investors can secure properties at a significant discount or in areas where the market rents are closer to the FMR, the investment potential is limited. However, for investors willing to engage in a more nuanced strategy, such as focusing on lower-rent properties or multi-family units, there might be some opportunities to explore. Nonetheless, these strategies require careful consideration of the local market conditions and a willingness to operate at the lower end of the rental spectrum.

Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.