Location: Springfield, MA | Metro: Springfield, MA 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 | $1,150 |
| 1 Bedroom | $1,300 |
| 2 Bedrooms | $1,640 |
| 3 Bedrooms | $2,040 |
| 4 Bedrooms | $2,160 |
| 5 Bedrooms | $2,506 |
| 6 Bedrooms | $2,807 |
| 7 Bedrooms | $3,032 |
| 8 Bedrooms | $3,184 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,300 | $159,692 | 0.81% | C |
| 2BR | $1,640 | $301,206 | 0.54% | F |
| 3BR | $2,040 | $365,789 | 0.56% | F |
| 4BR | $2,160 | $429,211 | 0.5% | F |
| 5BR | $2,506 | $486,144 | 0.52% | F |
U.S. Census Bureau data (2024)
A decision tree for whether to invest in ZIP 01089 (West Springfield, MA) for Section 8 properties begins with the Fair Market Rent (FMR) and its ability to cover debt service.
Step 1: The FMR of $1,200 for ZIP 01089 in fiscal year 2024 must be evaluated against the debt service of a $354,726 property. This requires calculating the expected monthly mortgage payment, including principal, interest, taxes, and insurance. Assuming a standard 30-year fixed-rate mortgage at an average rate of 5%, the monthly mortgage payment would be approximately $1,850. Therefore, the FMR of $1,200 does not clear the debt service, leading to a No on investing based solely on FMR coverage.
Step 2: Next, compare the Zillow Observed Rental Index (ZORI) of $1,495 to the FMR. The ZORI is higher than the FMR, indicating that the market rent is above the FMR. This suggests that landlords can potentially charge more than the FMR to non-Section 8 tenants, but they must also consider the demand for Section 8 properties.
Step 3: Evaluate the rental demand and days on market (DOM). With 41.5% of residents being renters and the DOM being listed as N/A, there's a significant portion of the population renting, which indicates strong demand. However, the lack of DOM data means we cannot fully assess how quickly properties are rented out.
Branch A - Yes: If you are willing to accept a subsidy from the government to cover the difference between the FMR and your debt service costs, and if you believe the high ZORI reflects a robust local economy capable of supporting higher rents, then you might proceed with purchasing. Additionally, the strong rental percentage supports the idea that there is sufficient demand for rental properties in general.
Branch B - It Depends: If the absence of DOM data is concerning, and you want a clearer picture of how quickly properties are leased, further investigation into the local rental market dynamics is necessary. Look into other sources for DOM data or speak with local real estate agents to get a better sense of the leasing speed.
Branch C - No: If you are unwilling to rely on government subsidies and prefer that the FMR alone covers all costs associated with owning a property, then purchasing in ZIP 01089 is not advisable given the current FMR and property price.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). 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.