Section 8 Fair Market Rent (FMR) for ZIP 99504 - 2027

Investment Score for ZIP 99504

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	$1,150
1 Bedroom	$1,230
2 Bedrooms	$1,610
3 Bedrooms	$2,230
4 Bedrooms	$2,690
5 Bedrooms	$3,120
6 Bedrooms	$3,494
7 Bedrooms	$3,774
8 Bedrooms	$3,963

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	$1,610	$262,000	0.61%	D
3BR	$2,230	$368,492	0.61%	D
4BR	$2,690	$449,863	0.6%	F
5BR	$3,120	$485,164	0.64%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 99504 (Anchorage, AK) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 99504 in Anchorage, AK, is set by HUD for 2026. For a two-bedroom apartment, the FMR is $1730 per month. However, the actual median rent for a two-bedroom unit, based on Zillow data, is significantly higher at $251,418, which translates to approximately $2,095 per month when considering typical mortgage payments and property taxes. This means that the price-to-FMR ratio is 12.1x, indicating a substantial gap between what HUD deems fair and the actual rental market prices. This disparity creates significant constraints for voucher holders. They would need to find landlords willing to accept a voucher for a two-bedroom apartment at $1730, which is well below the market rate. The high price-to-FMR ratio suggests that many landlords might prefer market-rate tenants over those using vouchers, especially if they can secure higher rents. #### Affordability & Renter Profile ZIP code 99504 has a population of 42,093, with 33.9% of residents being renters. The median household income in the area is $86,710. A two-bedroom apartment's FMR represents about 23.9% of the median income, which is relatively affordable for middle-income families. However, given the actual median rent is much higher, it becomes challenging for lower-income households to afford housing without assistance. The occupancy rate of 90.9% indicates that the market is moderately tight but not excessively so. There is still some room for new units or conversions, but the high demand for rentals suggests that competition among potential tenants is likely strong. This tightness could be a factor driving up market rents beyond the FMR levels. #### Investor Angle From an investor's perspective, the ZIP code's dynamics present both opportunities and challenges. At the FMR level, a two-bedroom apartment would generate $1730 per month in rental income. However, the actual median rent is around $2,095, which is nearly 20% higher. This discrepancy means that investors who can secure market-rate tenants will have better cash flow compared to those relying solely on Section 8 vouchers. To determine if this ZIP code is cash-flow positive at the FMR level, we must consider the typical costs associated with owning and managing a rental property. Assuming a conservative estimate of operating expenses (including maintenance, utilities, and property management) at 40% of the gross rental income, the net income at FMR would be: \[ \text{Net Income} = \$1730 - (\$1730 \times 0.40) = \$1730 - \$692 = \$1038 \] Given the median home value of $251,418, the monthly mortgage payment (assuming a 30-year fixed-rate mortgage at 4.5%) would be approximately: \[ \text{Monthly Mortgage Payment} = \frac{\$251,418 \times 0.045}{12 \times (1 - (1 + 0.045)^{-30})} \approx \$1225 \] When comparing the net income ($1038) to the monthly mortgage payment ($1225), it appears that the property would not be cash-flow positive at the FMR level. This makes it a less attractive option for investors focusing solely on Section 8 vouchers. However, the investment grade of this ZIP code depends on the ability to secure market-rate tenants. If an investor can achieve the actual median rent of $2,095, the net income would be: \[ \text{Net Income} = \$2095 - (\$2095 \times 0.40) = \$2095 - \$838 = \$1257 \] This would result in a positive cash flow of $32 per month, making it marginally viable for investors seeking steady returns. #### Specific Actionable Insights 1. **Target Market-Rate Tenants**: Given the high price-to-FMR ratio, investors should focus on attracting market-rate tenants rather than relying solely on Section 8 vouchers. This strategy would yield better cash flow and potentially higher profits. 2. **Consider Property Upgrades**: To attract market-rate tenants, consider upgrading properties to meet their expectations. This could include modernizing kitchens and bathrooms, improving insulation for energy efficiency, and adding amenities like laundry facilities or parking spaces. These upgrades can justify higher rents and improve the overall appeal of the property. 3. **Negotiate with Landlords**: For those interested in Section 8 vouchers, negotiate with landlords to ensure they understand the benefits of accepting vouchers, such as guaranteed payments and reduced vacancy rates. Highlight the stability and security that comes with government-backed rent. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 99504 is to **Skip** investing in properties intended for voucher holders due to the significant gap between FMR and actual market rents. Instead, investors should target areas where the FMR is closer to the actual rental market rates or focus on securing market-rate tenants in this ZIP code to ensure positive cash flow. In summary, while there are opportunities for investors in 99504, the current market conditions make it challenging to rely solely on Section 8 vouchers for financial viability.

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.