Section 8 Fair Market Rent (FMR) for ZIP 97501 - 2027

Investment Score for ZIP 97501

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	$1,070
1 Bedroom	$1,240
2 Bedrooms	$1,530
3 Bedrooms	$2,120
4 Bedrooms	$2,530
5 Bedrooms	$2,935
6 Bedrooms	$3,287
7 Bedrooms	$3,550
8 Bedrooms	$3,728

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
1BR	$1,240	$229,947	0.54%	F
2BR	$1,530	$290,150	0.53%	F
3BR	$2,120	$381,564	0.56%	F
4BR	$2,530	$441,158	0.57%	F
5BR	$2,935	$478,767	0.61%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 97501 (Medford, OR) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 97501 is set by HUD for the year 2026. For a two-bedroom unit, the FMR is $1510, which represents 28.3% of the median household income in Medford, OR. This indicates that the rent is relatively affordable compared to the income levels in the area. However, the actual rental market in Medford, particularly for two-bedroom units, is significantly higher. According to Zillow, the median price for a two-bedroom unit is $282,341, which translates to a monthly rental cost of approximately $1512 based on a typical mortgage payment (assuming a 4.5% interest rate and a 30-year term). The price-to-FMR ratio for a two-bedroom unit is 15.6x, meaning that the actual rental costs are much higher than the FMR. This creates a significant constraint for voucher holders, who can only afford rents up to the FMR level. In reality, landlords may be reluctant to accept vouchers due to the high demand for rentals at market rates. Consequently, voucher holders might struggle to find units within their budget, leading to potential difficulties in securing housing. #### Affordability & Renter Profile Medford has a population of 44,670, with 45.6% of residents being renters. This high percentage suggests a robust rental market, but it also implies that many residents are facing affordability challenges. The occupancy rate of 94.7% indicates that the market is quite tight, with very few vacant units available. Given the median household income of $63,977, the FMR for a two-bedroom unit at $1510 is indeed a reasonable portion of the income. However, the actual market rents far exceed this amount, making it difficult for low-income households to find affordable housing without assistance. The high rent-to-income ratio and the limited availability of units suggest that the market is undersupplied, especially for those relying on Section 8 vouchers. This tightness could lead to increased competition among tenants and potentially higher rents, further exacerbating the affordability issue. #### Investor Angle From an investor perspective, the ZIP code 97501 presents both opportunities and challenges. The actual market rents are significantly higher than the FMR, which means that properties rented at FMR levels may not generate sufficient cash flow to cover expenses such as mortgage payments, property taxes, insurance, and maintenance. For example, a two-bedroom unit renting at $1510 per month would need to be priced at around $181,200 to break even (assuming a 4.5% interest rate and a 30-year term), which is well below the median market price of $282,341. Given the high price-to-FMR ratio, it is unlikely that investors will find the ZIP code cash-flow positive when renting at FMR levels. This makes the investment grade relatively low, as the primary source of income would be government subsidies rather than market rents. Additionally, the tight market conditions mean that there is a risk of vacancies if landlords choose not to participate in the Section 8 program due to the lower rents they can charge. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors should consider focusing on smaller units such as one-bedroom or studio apartments. These units have lower FMRs ($1210 for 1BR) and may be more likely to attract tenants willing to pay market rates, thereby improving cash flow. 2. **Seek Government Subsidies Beyond Section 8**: Investors should explore other government subsidy programs that offer higher rental assistance. For instance, the Housing Choice Voucher Program (Section 8) might not cover the full market rent, but other programs like Low-Income Housing Tax Credits (LIHTC) or Community Development Block Grants (CDBG) could provide additional financial support. 3. **Consider Property Location**: Within the ZIP code, certain areas might be more attractive to voucher holders due to proximity to public services, schools, or employment centers. Investors should conduct a detailed analysis of sub-markets within 97501 to identify these areas and potentially achieve better occupancy rates. #### Bottom Line For Section 8-focused investors, the ZIP code 97501 presents a challenging environment. The high price-to-FMR ratio and tight market conditions make it difficult to achieve positive cash flow solely through FMR rents. Therefore, the recommendation is to **Skip** investing in this ZIP code unless you can secure alternative sources of government subsidies or focus on smaller units where the gap between FMR and market rent is less pronounced. If you decide to invest, ensure that you have a thorough understanding of the local market dynamics and are prepared to navigate the complexities of subsidized housing.

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.