Section 8 Fair Market Rent (FMR) for ZIP 89436 - 2027

Investment Score for ZIP 89436

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	$1,660
1 Bedroom	$1,900
2 Bedrooms	$2,390
3 Bedrooms	$3,190
4 Bedrooms	$3,700
5 Bedrooms	$4,292
6 Bedrooms	$4,807
7 Bedrooms	$5,192
8 Bedrooms	$5,452

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	$2,390	$441,718	0.54%	F
3BR	$3,190	$540,822	0.59%	F
4BR	$3,700	$623,550	0.59%	F
5BR	$4,292	$720,114	0.6%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 89436 (Sparks, NV) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 89436, as per HUD's 2026 guidelines, is set at $2460 for a two-bedroom unit. This represents approximately 25.9% of the median household income of $114,100, indicating that it is relatively affordable for low-income families. However, the actual rental market in Sparks, NV, is significantly higher. The Zillow median price for a two-bedroom unit is $435,873, which translates to a monthly rent of approximately $14,800 based on a typical price-to-rent ratio. This means that the actual rent is nearly 14.8 times the FMR, creating a substantial gap between what voucher holders can afford and the market rate. Given this disparity, Section 8 voucher holders face significant constraints in finding suitable housing within their budget. They must either seek units below the FMR or negotiate with landlords willing to accept lower rent payments. The high price-to-FMR ratio suggests that landlords may be hesitant to participate in the Section 8 program due to the potential financial loss compared to market rates. #### Affordability & Renter Profile The population of ZIP 89436 is 49,544, with 25.3% being renters. The occupancy rate stands at 95.4%, indicating a tight rental market where most available units are occupied. Given the median household income of $114,100, the majority of residents are likely middle-class or higher, able to afford market-rate housing. However, the 25.3% who are renters represent a significant portion of the population that might struggle with affordability, especially those relying on Section 8 vouchers. The high occupancy rate and the fact that 25.3% of the population are renters suggest that there is a strong demand for rental properties. Despite this, the tight market and high price-to-FMR ratio indicate that the area is not oversupplied with affordable housing options. The limited availability of units within the FMR range makes it challenging for voucher holders to find suitable housing, potentially leading to longer wait times and increased competition for affordable units. #### Investor Angle From an investor's perspective, the ZIP code 89436 presents a mixed picture when considering the Section 8 market. The FMR for a two-bedroom unit is $2460, but the actual market rent is much higher. If an investor were to purchase a property at the Zillow median price of $435,873 and rent it out at the FMR, they would likely incur a significant financial loss. The price-to-FMR ratio of 14.8x indicates that the investment would not be cash-flow positive at the FMR level. Moreover, the investment grade for this ZIP code would be considered low due to the high market rents and the limited number of voucher holders who can afford these rates. Investors focusing solely on Section 8 tenants would need to carefully consider the financial implications of accepting lower rents compared to market rates. #### Specific Actionable Insights 1. **Target Affordable Units**: Investors should focus on acquiring properties that are already priced below the market rate and closer to the FMR. For example, targeting a two-bedroom unit priced around $2460 per month could make the investment more viable for Section 8 tenants. This approach would require identifying areas within the ZIP code where rents are lower, possibly near the outskirts or in less desirable neighborhoods. 2. **Negotiate with Landlords**: Given the high price-to-FMR ratio, landlords might be willing to accept slightly higher rents than the FMR if they can secure long-term, stable tenants through the Section 8 program. Investors could explore negotiating with landlords to offer a rent slightly above the FMR but still below market rates, say $2700-$2900 for a two-bedroom unit. This would provide a better return while still being accessible to voucher holders. 3. **Consider Multi-Family Properties**: Since the FMR for larger units (e.g., three-bedroom and four-bedroom) is higher, investing in multi-family properties could be more financially feasible. A three-bedroom unit with an FMR of $3340 or a four-bedroom unit with an FMR of $3880 would provide a better cash flow compared to single-family homes. Additionally, multi-family properties often have economies of scale that can help offset some of the financial losses associated with lower rents. #### Bottom Line Based on the provided data, the recommendation for Section 8-focused investors in ZIP code 89436 is to **skip** this market. The high price-to-FMR ratio and the tight rental market make it challenging to achieve positive cash flow. While there is a significant demand for rental properties, the financial constraints imposed by the Section 8 program would likely result in suboptimal returns. Investors should consider other markets with a more favorable price-to-FMR ratio and a greater supply of affordable units.

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.