Section 8 Fair Market Rent (FMR) for ZIP 87507 - 2027

Investment Score for ZIP 87507

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	$1,160
1 Bedroom	$1,290
2 Bedrooms	$1,590
3 Bedrooms	$1,960
4 Bedrooms	$2,090
5 Bedrooms	$2,424
6 Bedrooms	$2,715
7 Bedrooms	$2,932
8 Bedrooms	$3,079

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
1BR	$1,290	$278,831	0.46%	F
2BR	$1,590	$376,145	0.42%	F
3BR	$1,960	$460,469	0.43%	F
4BR	$2,090	$548,033	0.38%	F
5BR	$2,424	$686,605	0.35%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 87507 (Santa Fe, NM) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) figures for ZIP code 87507 indicate that the rent for a two-bedroom unit is set at $1590 per month. This figure represents 27.1% of the median household income of $70,398, which suggests that it is designed to be affordable for low-income families. However, the actual rental market in Santa Fe, particularly for two-bedroom units, is significantly higher. According to Zillow, the median price for a two-bedroom home in this ZIP code is $377,363, which translates to a monthly mortgage payment well above the FMR when considering typical interest rates and down payments. The price-to-FMR ratio of 19.8x indicates that the actual cost of renting or owning a property far exceeds the FMR, creating a significant gap between what voucher holders can afford and the market rate. This disparity means that Section 8 voucher holders face severe constraints in finding suitable housing within their budget. They are likely limited to a small subset of properties that accept vouchers and are priced at or below the FMR. Given the high occupancy rate of 94.3%, there is little room for additional units to come online, further tightening the availability of affordable housing. #### Affordability & Renter Profile ZIP code 87507 has a population of 51,386, with 32.7% of residents being renters. This percentage suggests a moderate level of rental activity, but the high occupancy rate implies that the market is relatively tight. The median household income of $70,398 is not exceptionally high, indicating that many residents are middle-class or lower-middle-class individuals who may struggle to find affordable housing options. Given the high price-to-FMR ratio, it is clear that the rental market is not aligned with the affordability needs of the majority of residents. This mismatch creates a challenging environment for renters, especially those relying on Section 8 vouchers. The median rent for a two-bedroom unit is much higher than the FMR, making it difficult for voucher holders to find homes that meet their financial criteria. Consequently, the demand for affordable housing is likely outstripping supply, leading to increased competition among renters and potentially driving up rents even further. #### Investor Angle From an investor perspective, the ZIP code 87507 presents a mixed picture. While the median home price is high at $377,363, the FMR for a two-bedroom unit is only $1590. If an investor were to purchase a property and rent it out at the FMR, they would likely face negative cash flow due to the high mortgage payments associated with such a high purchase price. For instance, a mortgage payment on a $377,363 home at a 4% interest rate over 30 years would be approximately $1797 per month, which is already above the FMR. Moreover, the high price-to-FMR ratio of 19.8x suggests that the market is not favorable for investors seeking to maximize returns through rental income alone. In order to achieve positive cash flow, investors would need to either significantly increase the rent beyond the FMR (which would limit the pool of potential tenants to those without vouchers) or find ways to reduce their mortgage costs, such as by purchasing properties at a discount or refinancing existing mortgages. In terms of investment grade, the ZIP code 87507 would be considered a speculative investment due to the high cost of entry and the limited pool of tenants who can afford the FMR. Investors should carefully consider the risks involved before committing capital to this market. #### Specific Actionable Insights 1. **Focus on Multi-Family Properties**: Given the high price-to-FMR ratio, single-family homes may not be the best option for investors looking to generate positive cash flow. Instead, multi-family properties, such as duplexes or small apartment buildings, might offer better opportunities. These properties often have lower per-unit costs and can be rented out at slightly higher rates to non-voucher tenants while still maintaining some units for voucher holders. For example, a two-bedroom unit in a multi-family property could be rented out at $1800 per month, which is still below market rates but allows for a margin above the FMR. 2. **Consider Renovation Projects**: Investors might find value in purchasing older, less desirable properties at a discount and renovating them to bring them up to a standard where they can command higher rents. By targeting properties that are currently priced below the median but still within the FMR range, investors can create a niche market for affordable housing. For instance, a two-bedroom unit that is currently valued at $250,000 could be renovated and rented out at $1650 per month, providing a modest positive cash flow while still being accessible to voucher holders. #### Bottom Line For investors focusing on Section 8 vouchers, ZIP code 87507 presents a challenging market. The high price-to-FMR ratio and tight rental market make it difficult to find properties that can generate positive cash flow while adhering to the FMR guidelines. Therefore, the recommendation for Section 8-focused investors is to **skip** this ZIP code unless they can identify unique opportunities, such as multi-family properties or renovation projects, that allow them to navigate around these constraints. In summary, the dynamics of the rental market in ZIP 87507 do not align well with the goals of Section 8 voucher holders or investors seeking to capitalize on this program. The high cost of housing and limited availability of affordable units suggest that this market is not conducive to positive cash flow investments based on the FMR.

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.