Section 8 Fair Market Rent (FMR) for ZIP 89506 - 2027

Investment Score for ZIP 89506

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	$1,460
1 Bedroom	$1,660
2 Bedrooms	$2,090
3 Bedrooms	$2,790
4 Bedrooms	$3,230
5 Bedrooms	$3,747
6 Bedrooms	$4,197
7 Bedrooms	$4,533
8 Bedrooms	$4,760

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	$2,090	$320,677	0.65%	D
3BR	$2,790	$445,609	0.63%	D
4BR	$3,230	$508,919	0.63%	D
5BR	$3,747	$587,702	0.64%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 89506 (Reno, NV) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 89506 in Reno, NV, for a two-bedroom unit is set at $2,090 for 2026. However, the Zillow median price for a two-bedroom home in this area is significantly higher at $312,086. This translates to a price-to-FMR ratio of 12.4x, indicating that the actual market rent far exceeds the FMR. For instance, a typical two-bedroom rental might cost around $1,660 to $2,840, which is above the FMR of $2,090. This means that tenants using Section 8 vouchers will face significant constraints in finding suitable housing within their budget. The voucher amount may only cover a portion of the rent, leaving a substantial gap for the tenant to pay out-of-pocket. #### Affordability & Renter Profile The median household income in ZIP 89506 is $86,396, and 29.3% of the population are renters. Given that the FMR for a two-bedroom unit is 29.0% of the median income, it suggests that the average renter in this ZIP code would find it challenging to afford market-rate housing. The occupancy rate of 92.8% indicates a relatively tight rental market, where there is high demand for available units. This tightness could lead to upward pressure on rents, making it even harder for low-income renters to find affordable housing. #### Investor Angle From an investor perspective, the ZIP code 89506 presents a mixed picture when considering cash flow and investment grade based on FMR. The FMR for a two-bedroom unit is $2,090, but the actual market rent is likely to be higher, possibly ranging from $1,660 to $2,840. If an investor can secure a property at a rent closer to the FMR, they might achieve positive cash flow. However, given the high price-to-FMR ratio, it is unlikely that most properties will be rented at the FMR level. Instead, investors should expect to charge market rates, which may exceed the FMR by a significant margin. The investment grade for this ZIP code is moderate due to the tight rental market and the potential for strong demand. However, the challenge lies in finding properties that can be rented at or near the FMR without sacrificing profitability. Investors need to carefully consider the balance between market rates and the limitations imposed by Section 8 vouchers. #### Specific Actionable Insights 1. **Target Properties Below Market Rates**: Investors should focus on acquiring properties that can be rented at or slightly below the market rate but still within the FMR range. For example, a two-bedroom unit priced at $2,090 or less would be ideal for attracting Section 8 tenants while maintaining reasonable cash flow. 2. **Consider One-Bedroom Units**: Since the FMR for a one-bedroom unit is $1,660, which is lower than the Zillow median price for a two-bedroom unit, investing in one-bedroom units might provide better alignment with Section 8 voucher amounts. This could help mitigate the risk of vacancy and ensure steady cash flow. 3. **Evaluate Property Management Costs**: Given the high price-to-FMR ratio, investors must also evaluate the costs associated with property management and maintenance. These expenses can eat into the profit margins, especially if the rent is close to the FMR. Investors should aim for properties that require minimal ongoing maintenance to keep costs down. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP 89506 is to **Hold**. While there is a strong demand for rental properties, the high price-to-FMR ratio makes it difficult to find properties that can be rented at or near the FMR without compromising profitability. Investors should proceed cautiously and focus on properties that offer a balance between affordability and market rates. The tight rental market suggests that demand will remain robust, but the challenge lies in aligning rents with the FMR to attract Section 8 tenants effectively.

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.