Section 8 Fair Market Rent (FMR) for ZIP 89412 - 2027

FY 2027 Fair Market Rent Rates

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

To determine if a landlord should buy in ZIP code 89412 for Section 8 purposes, follow this decision tree based on the provided data.

1) Does FMR $1580 (zip FY 2024) clear debt service on a property?

• No: If the Fair Market Rent (FMR) of $1580 does not cover the total debt service costs, including mortgage payments, property taxes, insurance, and maintenance, then investing in this area for Section 8 is not financially viable. Landlords must ensure that the rental income meets or exceeds their financial obligations.
• Yes: Proceed to the next question.

2) Is market rent above, at, or below FMR?

• Above FMR: If the market rent is higher than the FMR of $1580, landlords can consider renting to non-Section 8 tenants for better returns. However, they should still evaluate the demand for Section 8 properties.
• At FMR: If the market rent matches the FMR, landlords can expect to break even on Section 8 properties. This scenario requires careful management to avoid losses.
• Below FMR: If the market rent is lower than the FMR, landlords might find it advantageous to participate in the Section 8 program, as they could potentially charge closer to the FMR rate. This would increase their revenue compared to market rates.

3) Are 50.0% renters + N/A-day Days on Market (DOM) enough demand?

• 50.0% renters: With half of the population renting, there is a substantial demand for rental properties. However, the exact number of days on market (DOM) is needed to fully assess the speed at which properties are rented. A low DOM indicates high demand, making it easier to fill vacancies.
• It depends on DOM: If the DOM is low, say under 30 days, then the high percentage of renters combined with quick turnover suggests strong demand. In this case, landlords can confidently invest in Section 8 properties. If the DOM is high, indicating slower turnover, landlords should weigh the benefits of Section 8 against the risks of extended vacancy periods.

In summary, landlords should first ensure that the FMR of $1580 can cover their debt service. Next, they should compare market rents to the FMR to decide whether to participate in the Section 8 program. Finally, the combination of a 50.0% rental rate and the actual DOM will indicate if there is sufficient demand for Section 8 properties in ZIP 89412.

Data Sources: FMR data from HUD (2027). 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.