Section 8 Fair Market Rent (FMR) for ZIP 01420 - 2027

Investment Score for ZIP 01420

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	$1,250
1 Bedroom	$1,480
2 Bedrooms	$1,790
3 Bedrooms	$2,280
4 Bedrooms	$2,660
5 Bedrooms	$3,086
6 Bedrooms	$3,456
7 Bedrooms	$3,732
8 Bedrooms	$3,919

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
1BR	$1,480	$214,855	0.69%	D
2BR	$1,790	$356,610	0.5%	F
3BR	$2,280	$417,221	0.55%	F
4BR	$2,660	$453,095	0.59%	F
5BR	$3,086	$500,802	0.62%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 01420 (Fitchburg, MA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 01420 in Fitchburg, Massachusetts, is set by HUD for the year 2026. The FMRs are as follows: - 0BR: $1140 - 1BR: $1340 - 2BR: $1660 (which represents 27.4% of the median household income) - 3BR: $2130 - 4BR: $2500 These FMRs represent the maximum rent that a Section 8 voucher holder can pay. However, the actual rental market in Fitchburg is significantly higher. For instance, the Zillow median price for a 2BR unit is $349,859, which translates to a monthly rent of approximately $1,760 based on typical mortgage rates and property management costs. This means that the actual rent for a 2BR unit is about $100 more than the FMR, making it challenging for voucher holders to find suitable housing. The disparity between the FMR and actual rents suggests that voucher holders face significant constraints in securing affordable housing units that fit within their budget. #### Affordability & Renter Profile In ZIP code 01420, 45.8% of households are renters, indicating a substantial demand for rental properties. With a median household income of $72,780, the affordability of housing is a critical issue. The FMR for a 2BR unit is $1660, which is indeed affordable for many residents since it represents only 27.4% of the median household income. However, the actual market rent is much higher, making it difficult for low-income families to afford decent housing without assistance. Given the occupancy rate of 93.9%, the rental market appears to be relatively tight, with most available units being occupied. This high occupancy rate suggests that there is little room for new rental properties to enter the market without facing competition from existing units. The combination of high rent prices and limited availability indicates that the market is likely undersupplied, especially for those relying on Section 8 vouchers. #### Investor Angle From an investor perspective, the ZIP code 01420 offers a mixed landscape. The FMRs provide a benchmark for what voucher holders can afford, but the actual rental market is far above these levels. The price-to-FMR ratio for a 2BR unit is 17.6x, meaning that the median home value is 17.6 times the FMR. This ratio highlights the significant gap between the cost of ownership and the rent that can be charged under the Section 8 program. To determine if this ZIP code is cash-flow positive at FMR, we need to consider the operational costs and potential revenue. Assuming a 2BR unit has an FMR of $1660, the total annual rent would be $19,920. If the typical operational costs (including maintenance, taxes, insurance, and management fees) amount to around 40% of the gross rental income, then the net operating income (NOI) would be approximately $11,952 per year. Given the median home value of $349,859, the mortgage payment on a conventional loan (assuming a 20% down payment and a 4.5% interest rate over 30 years) would be roughly $1,270 per month or $15,240 annually. Thus, the NOI is lower than the mortgage payment, indicating that the investment would not be cash-flow positive at the FMR. The investment grade would be considered low due to the limited ability to generate positive cash flow from Section 8 rents alone. #### Specific Actionable Insights 1. **Target Larger Units**: Given the higher FMRs for larger units, investors might consider focusing on 3BR and 4BR properties. The FMR for a 3BR unit is $2130, which is closer to the actual market rent. This could potentially offer better cash flow opportunities compared to smaller units. 2. **Consider Non-Section 8 Tenants**: Due to the high price-to-FMR ratio, investors should also consider renting to non-Section 8 tenants who can afford the higher market rates. This strategy could help offset the financial limitations imposed by the Section 8 program. 3. **Utilize Property Management Services**: Given the complexity of managing Section 8 properties, investors should leverage professional property management services. These services can handle the administrative burden, ensuring compliance with HUD regulations and improving tenant retention. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 01420 is to **Skip** this market. The high price-to-FMR ratio and the tight rental market make it challenging to achieve positive cash flow solely through Section 8 rents. Investors should look for areas where the FMR is closer to the actual market rent or where there is a higher supply of rental units relative to demand. Alternatively, they could consider diversifying their tenant base to include non-Section 8 renters who can afford higher market rates.

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.