Location: Fairbanks-College, AK | Metro: Fairbanks-College, AK MSA
Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,050 |
| 1 Bedroom | $1,150 |
| 2 Bedrooms | $1,510 |
| 3 Bedrooms | $2,100 |
| 4 Bedrooms | $2,540 |
| 5 Bedrooms | $2,946 |
| 6 Bedrooms | $3,300 |
| 7 Bedrooms | $3,564 |
| 8 Bedrooms | $3,742 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,150 | $205,490 | 0.56% | F |
| 2BR | $1,510 | $281,758 | 0.54% | F |
| 3BR | $2,100 | $408,805 | 0.51% | F |
U.S. Census Bureau data (2024)
A decision to invest in ZIP code 99712 (Fairbanks, AK) for Section 8 properties hinges on three key factors: Fair Market Rent (FMR), market rent, and demand indicators. Let's break down the analysis:
Does FMR $1350 (FY 2024) clear debt service on a $312,297 property?
Yes. The FMR of $1350 is the maximum rental assistance payment a landlord can receive per month for a Section 8 tenant. To determine if this clears the debt service, we need to calculate the monthly mortgage payment. Assuming a 30-year fixed-rate mortgage at an average rate of 4.5%, the monthly principal and interest payment would be approximately $1560. However, this does not include property taxes, insurance, and maintenance costs, which typically add another 30-50% to the total monthly debt service. Therefore, the FMR alone would not cover all debt service costs without additional income sources or cost reductions.
Is market rent $1,288 (Census ACS) above, at, or below FMR?
Below FMR. The Census ACS indicates that the average market rent in ZIP 99712 is $1,288, which is below the FMR of $1350. This suggests that landlords could potentially receive higher rents through the Section 8 program compared to the average market rent, making it a favorable option for those looking to maximize their rental income.
Are 14.2% renters + N/A-day days on market (DOM) enough demand?
It depends. With 14.2% of residents being renters, there is a significant portion of the population that could be eligible for Section 8 housing. However, the lack of data on the days on market (DOM) makes it difficult to assess how quickly properties might be rented. In general, a lower DOM indicates higher demand, but without this information, we must rely on other indicators such as the percentage of renters and local economic conditions. Given the higher FMR relative to market rent, demand for affordable housing is likely strong, but landlords should also consider vacancy rates and the competition for Section 8 tenants.
In conclusion, ZIP 99712 offers a scenario where the FMR exceeds the average market rent, creating a potential advantage for landlords. However, the FMR may not fully cover the total debt service costs, so landlords should factor in additional revenue streams or cost-saving measures. Demand for rentals appears to be present, but without precise DOM data, landlords must make a judgment based on the percentage of renters and the overall economic environment. Landlords should proceed cautiously, considering these factors before making a purchase decision.
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.