Section 8 Fair Market Rent (FMR) for ZIP 87105 - 2027

Investment Score for ZIP 87105

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	$910
1 Bedroom	$1,070
2 Bedrooms	$1,320
3 Bedrooms	$1,840
4 Bedrooms	$2,160
5 Bedrooms	$2,506
6 Bedrooms	$2,807
7 Bedrooms	$3,032
8 Bedrooms	$3,184

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
1BR	$1,070	$192,507	0.56%	F
2BR	$1,320	$238,827	0.55%	F
3BR	$1,840	$298,892	0.62%	D
4BR	$2,160	$377,906	0.57%	F
5BR	$2,506	$427,858	0.59%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 87105 (Albuquerque, NM) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 87105, as determined by HUD for 2026, is set at $1270 for a two-bedroom unit. This figure represents 27.4% of the median household income in the area, which stands at $55,644. However, the actual rental market in 87105 is significantly higher, with Zillow reporting a median price for a two-bedroom unit at $233,925. The price-to-FMR ratio is a staggering 15.3x, indicating that actual rents are much higher than the FMR. For voucher holders, this means they will face significant constraints in finding affordable housing units that accept their vouchers. Landlords who accept Section 8 vouchers must rent their properties at rates that do not exceed the FMR, making it challenging to compete with the market rate rentals. #### Affordability & Renter Profile In ZIP code 87105, 25.8% of the population are renters, and the occupancy rate is 93.9%, suggesting a relatively tight rental market. Given that the median household income is $55,644, and the FMR for a two-bedroom unit is $1270, it is clear that the rental market is not aligned with the affordability of the typical resident. With the actual market rent being approximately 15.3 times the FMR, many residents would struggle to afford market-rate rentals without assistance. This makes the demand for affordable housing, particularly those accepting Section 8 vouchers, quite high. The tight market conditions imply that there is a strong need for more affordable rental units to meet the demands of low-income households. #### Investor Angle From an investor perspective, the ZIP code 87105 presents a mixed picture when considering the FMR. While the FMR for a two-bedroom unit is $1270, the actual market rent is much higher, at around $233,925. This discrepancy suggests that landlords who accept Section 8 vouchers might find it challenging to achieve positive cash flow due to the lower rent ceiling imposed by the FMR. However, the high occupancy rate indicates that there is a strong demand for rental units, which could still make the ZIP code attractive for investors willing to accept lower returns in exchange for stable tenancy. The investment grade for this ZIP code would likely be moderate to low, given the high market rents compared to the FMR. Investors should carefully consider the trade-offs between accepting Section 8 vouchers and potentially achieving higher returns by renting at market rates. The high price-to-FMR ratio also suggests that the rental market is not aligned with the income levels of the majority of residents, which could pose long-term risks if the local economy does not improve. #### Specific Actionable Insights 1. **Focus on Affordable Units**: Investors looking to participate in the Section 8 program should focus on acquiring properties that can be rented at or below the FMR. Given the high price-to-FMR ratio, this might mean purchasing older or less desirable properties that are more likely to be affordable. For example, a two-bedroom unit should ideally cost no more than $1270 per month to ensure it is within the FMR guidelines. 2. **Consider Mixed-Income Developments**: To balance the need for affordable housing with potential for higher returns, investors might consider developing mixed-income properties. These developments could include a mix of units that accept Section 8 vouchers and market-rate units. This approach would allow investors to cater to both low-income tenants and those who can afford higher rents, thereby improving overall cash flow. #### Bottom Line Given the high price-to-FMR ratio and the tight rental market, the recommendation for Section 8-focused investors in ZIP code 87105 is to **Skip**. The discrepancy between the FMR and actual market rents makes it difficult to achieve positive cash flow while adhering to the voucher program requirements. Additionally, the high occupancy rate suggests that there is already a significant demand for rental units, but the supply of affordable units is limited. Therefore, unless an investor is willing to accept very low returns or has a specific interest in community development projects, it would be prudent to look elsewhere for investment opportunities that align better with the goals of the Section 8 program.

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.