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 | $1,430 |
| 1 Bedroom | $1,610 |
| 2 Bedrooms | $2,040 |
| 3 Bedrooms | $2,540 |
| 4 Bedrooms | $2,690 |
| 5 Bedrooms | $3,120 |
| 6 Bedrooms | $3,494 |
| 7 Bedrooms | $3,774 |
| 8 Bedrooms | $3,963 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,040 | $319,286 | 0.64% | D |
| 3BR | $2,540 | $337,939 | 0.75% | D |
| 4BR | $2,690 | $372,224 | 0.72% | D |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 01128 in Springfield, MA, provides a clear picture of potential rental income under different scenarios. To begin, let's consider the Federal Market Rent (FMR) for a two-bedroom apartment, which is set at $1490 per month for FY 2024. This translates into an annual rental income of $17,880. Given the median home value in the area stands at $331,075, we can calculate the implied gross yield for a property rented at this rate.
To find the gross yield, divide the annual rental income by the median home value. In this case, the gross yield is calculated as follows:
$17,880 / $331,075 = 0.054 or 5.4%
This figure represents the gross yield if a property were rented at the FMR rate. However, the market rent for the area is listed as N/A, which complicates the analysis. Assuming the market rent is higher than the FMR, the gross yield would also be higher. For instance, if the market rent were $1600 per month, the annual rental income would be $19,200, leading to a gross yield of:
$19,200 / $331,075 = 0.058 or 5.8%
The gross yield comparison is concrete: renting at the FMR rate of $1490 per month would result in a 5.4% gross yield, while renting at a hypothetical market rate of $1600 per month would increase this to 5.8%. The reality, however, is that only 5.9% of residents in ZIP 01128 are renters, indicating a limited demand for rental properties. Additionally, the Days on Market (DOM) figure is listed as N/A, suggesting either a very quick or very slow rental market turnover. Without specific DOM data, it's difficult to determine how quickly a property might be leased, affecting the overall investment strategy.
Given these constraints, the FMR scenario appears more realistic due to the low renter density. Landlords should be prepared for a potentially slower leasing process and consider the benefits of guaranteed income through Section 8 versus the uncertainties of the private rental market. Investors should conduct further research into local rental trends and vacancy rates to refine their projections.
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.