Section 8 Fair Market Rent (FMR) for ZIP 01546 - 2027

FY 2027 Fair Market Rent Rates

The analysis of the Section 8 cap-rate scenario for ZIP code 01546 in Massachusetts reveals some key insights, despite limited data availability.

The Fair Market Rent (FMR) for a two-bedroom apartment in ZIP 01546 for fiscal year 2024 is set at an annual rate of $1620. This figure represents the government's benchmark for rental assistance under the Section 8 program. However, the median home value and market rent for the area are currently unavailable, making it challenging to provide a precise gross yield comparison.

In the context of Section 8, the implied gross yield can be calculated based on the FMR. Assuming a median home value is known, the gross yield would be derived by dividing the annualized FMR by the median home value. For example, if the median home value were $300,000, the gross yield for a Section 8 property would be approximately 0.54% ($1620 / $300,000).

Without a specific market rent figure, we cannot calculate a gross yield for non-Section 8 properties. However, typically, market rents would be higher than the FMR, leading to a higher gross yield. The lack of market rent data means that a direct comparison cannot be made, but it is safe to assume that the gross yield for market-rate rentals would exceed that of the Section 8 scenario.

The renter density and Days on Market (DOM) figures are also unavailable. These metrics are crucial for understanding the local rental market dynamics. High renter density and low DOM suggest a robust demand for rentals, which could support higher market rents and thus a better gross yield for non-Section 8 properties. Conversely, lower renter density and higher DOM might indicate a less favorable environment for market-rate rentals.

Given the incomplete data, the most realistic scenario is likely the Section 8 program, as it offers a guaranteed income stream based on the FMR. Investors should consider the stability and predictability of Section 8 payments versus the potential volatility of market-rate rents.

To summarize, the Section 8 cap-rate for ZIP 01546 implies a gross yield of around 0.54%, assuming a median home value of $300,000. While market-rate rentals would likely offer a higher gross yield, the exact figure cannot be determined without additional data. The choice between Section 8 and market-rate rentals should be informed by the investor's risk tolerance and preference for stable income over potentially higher yields.

Data Sources: FMR data from HUD (2027).

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.