Section 8 Fair Market Rent (FMR) for ZIP 99206 - 2027

Investment Score for ZIP 99206

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	$1,050
1 Bedroom	$1,110
2 Bedrooms	$1,410
3 Bedrooms	$1,930
4 Bedrooms	$2,360
5 Bedrooms	$2,738
6 Bedrooms	$3,067
7 Bedrooms	$3,312
8 Bedrooms	$3,478

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	$1,110	$274,248	0.4%	F
2BR	$1,410	$339,885	0.41%	F
3BR	$1,930	$418,792	0.46%	F
4BR	$2,360	$468,283	0.5%	F
5BR	$2,738	$540,389	0.51%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 99206 (Spokane Valley, WA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 99206 is set by HUD for 2026 as follows: - 0BR: $1010 - 1BR: $1090 - 2BR: $1400 (which represents 20.5% of the median household income) - 3BR: $1910 - 4BR: $2290 These figures represent the maximum amount that a Section 8 voucher holder can pay for rent. However, the actual rental market in Spokane Valley is significantly higher. For instance, the Zillow median price for a 2BR unit is $332,752, which translates to a monthly mortgage payment of approximately $1,650 assuming a 30-year fixed-rate mortgage at 4.5%. This is already above the FMR of $1400 for a 2BR unit. Given the high cost of housing, voucher holders face significant constraints. They must find units that are willing to accept the lower FMR rates, which can be challenging in a market where rents are much higher. The price-to-FMR ratio of 19.8x for a 2BR unit indicates that the actual market rents are nearly 20 times the FMR rate, suggesting that landlords who accept Section 8 vouchers will likely have limited options for profit margins unless they manage costs effectively. #### Affordability & Renter Profile The population of Spokane Valley is 41,089, with 38.5% of residents being renters. The median household income is $81,764, indicating a relatively middle-class community. With 20.5% of the median income allocated to a 2BR unit's FMR, it suggests that many renters, particularly those relying on Section 8 vouchers, might struggle to afford housing without additional financial support. The occupancy rate of 96.2% indicates a tight rental market, with few vacancies available. This tightness could be due to the influx of new residents seeking affordable housing options, as well as the overall demand for rental properties in the area. Given the high proportion of renters and the tight market, there is likely strong competition for rental units, especially those that are affordable. #### Investor Angle From an investor perspective, the ZIP code 99206 presents both opportunities and challenges. The FMR rates are significantly lower than the actual market rents, which means that landlords accepting Section 8 vouchers will need to carefully manage their expenses to ensure profitability. For a 2BR unit, the FMR is $1400, while the actual market rent is around $1650 based on the Zillow median price. This implies that landlords who accept Section 8 vouchers will have a lower cash flow compared to those who do not. However, the stability of government-backed rental payments can be attractive to some investors, despite the reduced revenue. The investment grade for this ZIP code would be considered moderate. While there is a strong demand for rental properties, the high price-to-FMR ratio suggests that the returns on investment might be lower than in other areas. Additionally, the tight market and high occupancy rate indicate that there is little room for increasing rents beyond the FMR, making it less appealing for speculative investments. #### Specific Actionable Insights 1. **Focus on Cost Management**: Investors should focus on reducing operational costs such as maintenance, utilities, and property management fees. This can help maintain profitability when renting to Section 8 voucher holders. For example, if a landlord can keep operating costs below $650 per month for a 2BR unit, they can still achieve a positive cash flow of about $750 per month. 2. **Consider Multi-Family Properties**: Multi-family properties can offer better economies of scale and potentially higher returns. A 3BR or 4BR unit might be more attractive to families, and the FMR rates for these units are $1910 and $2290 respectively. These higher FMR rates can provide a better cash flow scenario, especially if the units are rented out fully. 3. **Look for Undervalued Properties**: Investors should seek out properties that are undervalued relative to the market. For instance, if a 2BR unit can be purchased for below $332,752, the monthly mortgage payment would be lower, allowing for a more favorable cash flow position even at the FMR rate. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 99206 is to **Hold**. While the market is tight and the price-to-FMR ratio is high, the stability of rental payments and the strong demand for affordable housing make it a viable option. However, investors should be prepared to manage costs closely and consider multi-family properties for better returns. The high market prices suggest that buying into this market might be risky unless you can find undervalued properties or are willing to accept lower initial returns for long-term stability.

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.