Section 8 Fair Market Rent (FMR) for ZIP 87112 - 2027

Investment Score for ZIP 87112

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	$950
1 Bedroom	$1,080
2 Bedrooms	$1,340
3 Bedrooms	$1,840
4 Bedrooms	$2,170
5 Bedrooms	$2,517
6 Bedrooms	$2,819
7 Bedrooms	$3,045
8 Bedrooms	$3,197

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	$1,340	$269,099	0.5%	F
3BR	$1,840	$326,671	0.56%	F
4BR	$2,170	$401,723	0.54%	F
5BR	$2,517	$481,043	0.52%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 87112 (Albuquerque, NM) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) figures for ZIP code 87112, as of 2026, indicate that the 2BR rental rate is set at $1,420 per month. This represents 23.0% of the median household income in the area, which stands at $73,937. However, it is important to note that the actual market rent for a 2BR property is significantly higher, with Zillow reporting a median price of $264,820. The price-to-FMR ratio of 15.5x suggests that the actual market rent for a 2BR property could be around $21,860 annually, or approximately $1,822 monthly. This means that the FMR is considerably lower than the actual market rent, creating a significant constraint for voucher holders. They would likely struggle to find units that are both affordable and willing to accept Section 8 vouchers at the FMR rates. #### Affordability & Renter Profile ZIP code 87112 has a population of 44,250, with 36.9% of residents being renters. The occupancy rate of 95.4% indicates a relatively tight rental market, where most available units are occupied. Given the high occupancy rate and the substantial gap between FMR and actual market rents, it is evident that the market is undersupplied with affordable housing options. The median household income of $73,937 suggests that the majority of residents have a moderate to upper-middle-class income, but the 36.9% renter population includes a mix of individuals who may be more financially constrained. These renters would benefit from the Section 8 program, but the limited supply of affordable units makes it challenging for them to find suitable housing. #### Investor Angle From an investor perspective, the ZIP code 87112 presents a mixed picture. While the actual market rents are high, the FMR rates are much lower. For instance, the FMR for a 2BR unit is $1,420, whereas the actual market rent is estimated to be $1,822. This discrepancy means that landlords who agree to accept Section 8 vouchers will receive less rent than they could get from market-rate tenants. However, the high occupancy rate and strong demand for rentals suggest that there is still potential for steady cash flow, albeit at a lower rate than market rents. To assess the investment grade, we need to consider the potential returns against the costs. If we assume a typical investment property cost of $264,820 for a 2BR unit, and a conservative annual appreciation rate of 3%, the property value could increase by $7,944 annually. Additionally, if the property is rented out at the FMR rate, the landlord would receive $17,040 annually ($1,420 x 12 months). Subtracting typical operating expenses (such as maintenance, utilities, and property taxes), which might amount to 30% of the gross rent, leaves us with a net annual income of approximately $11,928. This translates to a cap rate of about 4.5% ($11,928 / $264,820), which is modest but still potentially attractive given the stability of government-backed rental payments. #### Specific Actionable Insights 1. **Focus on Affordable Units**: Investors should focus on acquiring properties that can be rented at or near the FMR rates. This means looking for units that are smaller, such as 0BR or 1BR units, which have FMRs of $980 and $1,150 respectively. These units are more likely to be rented out to Section 8 voucher holders without leaving the landlord significantly underpaid compared to market rates. 2. **Consider Multi-Family Properties**: Multi-family properties can offer a better balance between affordability and cash flow. For example, a duplex with two 2BR units could generate a combined annual rent of $34,080 ($1,420 x 2 units x 12 months). Even with operating expenses, this could provide a more robust cash flow than single-unit properties. 3. **Evaluate Long-Term Appreciation Potential**: Given the high occupancy rate and strong demand for rentals, properties in ZIP 87112 are likely to appreciate over time. Investors should consider the long-term appreciation potential alongside the short-term rental income when evaluating the overall investment grade. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 87112 is to **Hold**. While the FMR rates are significantly lower than market rents, the strong demand and high occupancy rate make it a stable market. Investors should focus on acquiring smaller units or multi-family properties to maximize their cash flow while remaining competitive in the Section 8 voucher program. The potential for long-term appreciation also adds value to the investment, making it worthwhile to hold onto properties in this ZIP code despite the lower immediate rental income.

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.