Location: Farmington, NM | Metro: Farmington, NM MSA
Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)
| Unit Size | Monthly FMR |
|---|---|
| Studio | $940 |
| 1 Bedroom | $940 |
| 2 Bedrooms | $1,230 |
| 3 Bedrooms | $1,700 |
| 4 Bedrooms | $1,840 |
| 5 Bedrooms | $2,134 |
| 6 Bedrooms | $2,390 |
| 7 Bedrooms | $2,581 |
| 8 Bedrooms | $2,710 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,700 | $298,627 | 0.57% | F |
U.S. Census Bureau data (2024)
Investors considering properties in ZIP 87416 might have several concerns. Let's address these directly using available data.
Objection 1: Will the Fair Market Rent (FMR) of $1,190 for ZIP 87416 cover the mortgage on a $270,099 home?
The FMR of $1,190 is a critical figure for landlords in ZIP 87416. To determine if it can cover the mortgage on a $270,099 home, we must consider the typical interest rates and loan terms. Assuming a 30-year fixed-rate mortgage at an average rate of 5%, the monthly principal and interest payment would be approximately $1,460. This means that the FMR does not fully cover the mortgage payment, leaving a shortfall of about $270 per month. However, this calculation assumes no down payment and does not account for potential rental income above the FMR or other sources of revenue such as property appreciation or tax benefits.
Objection 2: Is there enough renter demand at 19.9%?
The percentage of renter-occupied housing units in ZIP 87416 stands at 19.9%. While this indicates a smaller proportion of renters compared to owner-occupied homes, it still represents a significant market segment. The question of whether this demand is sufficient depends on the total number of housing units and the vacancy rate. A lower percentage of renters could mean less competition among landlords but also fewer potential tenants. It is crucial to evaluate the local job market and demographic trends to understand future demand.
Objection 3: Will vouchers keep pace with market rents of $830?
The voucher program is designed to help low-income families afford housing, but the effectiveness of these vouchers in ZIP 87416 depends on their alignment with market rents. If the average voucher amount is significantly below the market rent of $830, landlords might find themselves subsidizing the difference. According to HUD guidelines, voucher amounts should reflect the local market conditions, but there is no guarantee they will always match the exact market rent. Investors should monitor local HUD announcements and adjust their expectations accordingly.
In conclusion, while the data provides insights into the financial viability of investing in ZIP 87416, it does not offer a complete picture. Careful consideration of local economic factors, housing trends, and the specific terms of any rental assistance programs is essential before making investment decisions.
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.