Section 8 Fair Market Rent (FMR) for ZIP 87123 - 2027

Investment Score for ZIP 87123

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: 2026-08-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
2BR	$1,320	$263,264	0.5%	F
3BR	$1,840	$335,677	0.55%	F
4BR	$2,160	$462,755	0.47%	F
5BR	$2,506	$570,578	0.44%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 87123 (Albuquerque, NM) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 87123, as of 2026, is set at $1330 for a two-bedroom unit. This represents approximately 24.8% of the median household income in the area, which is $64,359. The FMR is designed to ensure that renter households receiving Section 8 vouchers can afford housing without spending more than 30% of their income on rent. However, the actual rental market in 87123 is significantly higher than the FMR. For instance, the Zillow median price for a two-bedroom home is $260,844, indicating a price-to-FMR ratio of 16.3x. This suggests that the actual rental prices are likely much higher than the FMR, creating a significant gap between what voucher holders can pay and what landlords might charge. This disparity means that voucher holders face considerable constraints in finding affordable housing. They must either look for units below the market rate or negotiate with landlords willing to accept the FMR. Given the high price-to-FMR ratio, it is likely that many landlords will be hesitant to accept vouchers due to the potential financial loss compared to market rates. #### Affordability & Renter Profile In ZIP code 87123, 33.0% of the population are renters, indicating a substantial rental market. With a median household income of $64,359, the affordability of housing is a critical concern. The FMR for a two-bedroom unit at $1330 is indeed affordable for those earning the median income, but the actual rental market is far more expensive. The occupancy rate of 94.0% suggests that the rental market is relatively tight, with few vacant units available. This tightness could exacerbate the issue of affordability, as competition for units drives up rental prices. Given the high price-to-FMR ratio and the tight occupancy rate, it is likely that the rental market is undersupplied relative to demand. This situation benefits landlords but poses challenges for renters, especially those relying on Section 8 vouchers. The market dynamics suggest that there is a significant unmet need for affordable housing, particularly for low-income families who might otherwise struggle to find suitable accommodation. #### Investor Angle From an investor perspective, the ZIP code 87123 presents a mixed picture when considering cash flow and investment grade. At the FMR level, the two-bedroom units are priced at $1330 per month. However, given the high price-to-FMR ratio of 16.3x, it is evident that the actual rental prices are substantially higher. If we assume that the actual rental prices align closely with the Zillow median price, then the cash flow potential at FMR would be negative, as the market rate is well above the FMR. To illustrate, if a two-bedroom unit were to rent at the Zillow median price, the monthly rental income would be around $2173 ($260,844 divided by 12 months). This is nearly double the FMR of $1330, indicating that landlords accepting Section 8 vouchers would likely incur a financial loss unless they can find ways to offset this through other means, such as government subsidies or lower operating costs. The investment grade for properties in this ZIP code would depend on various factors, including the ability to secure tenants, the stability of the local economy, and the overall demand for rental units. Given the high occupancy rate and the significant number of renters, the demand for rental units is strong. However, the challenge lies in the affordability gap, which could make it difficult to attract and retain tenants who rely solely on Section 8 vouchers. #### Specific Actionable Insights 1. **Target Affordable Units**: Investors should focus on acquiring units that are already priced near or below the FMR. This would allow them to attract and retain Section 8 voucher holders without incurring significant financial losses. For example, targeting two-bedroom units priced at $1330 or less would be ideal. 2. **Negotiate with Landlords**: Given the high price-to-FMR ratio, negotiating with existing landlords to accept Section 8 vouchers at a slightly higher rate than the FMR could be beneficial. A compromise might involve setting the rent at $1400-$1500 per month for a two-bedroom unit, which is still below the market rate but closer to the actual rental prices. This would provide some financial cushion while remaining accessible to voucher holders. 3. **Government Subsidies**: Investors should explore additional government subsidies or programs that can help bridge the gap between the FMR and market rates. For instance, the Housing Choice Voucher Program (Section 8) provides additional assistance beyond the base FMR, which can help cover the difference. Understanding these supplementary programs can enhance the viability of investing in this ZIP code. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 87123 is to **Skip**. The high price-to-FMR ratio and the tight rental market indicate that the financial risk is too great for properties priced at the FMR. While there is a strong demand for rental units, the affordability gap makes it challenging to generate positive cash flow. Investors would be better served by focusing on areas where the FMR is closer to the actual rental prices, reducing the financial burden of accepting Section 8 vouchers.

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.