Location: Worcester, MA | Metro: Worcester, MA HUD Metro FMR Area
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 | $1,820 |
| 1 Bedroom | $1,830 |
| 2 Bedrooms | $2,360 |
| 3 Bedrooms | $2,960 |
| 4 Bedrooms | $3,370 |
| 5 Bedrooms | $3,909 |
| 6 Bedrooms | $4,378 |
| 7 Bedrooms | $4,728 |
| 8 Bedrooms | $4,964 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,360 | $403,744 | 0.58% | F |
| 3BR | $2,960 | $494,954 | 0.6% | F |
| 4BR | $3,370 | $611,729 | 0.55% | F |
| 5BR | $3,909 | $680,285 | 0.57% | F |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 01566 in Sturbridge, Massachusetts, provides insight into potential investment returns. The Fair Market Rent (FMR) for a 2-bedroom apartment in FY 2024 is set at $1950 per month, while the Census ACS reports a market rent of $1,914 per month for the same type of unit. To derive the cap rate, we must first annualize these figures.
Annualizing the FMR gives us a yearly income of $23,400 ($1950 x 12 months), while the market rent annualizes to $22,968 ($1,914 x 12 months). Given the median home value of $502,712, the implied gross yield for the FMR scenario is 4.66%, calculated as $23,400 divided by $502,712. For the market rent scenario, the gross yield drops slightly to 4.57%, calculated as $22,968 divided by $502,712.
The difference between these two yields is minimal, reflecting the closeness of the FMR and market rent figures. However, the FMR scenario presents a slightly higher gross yield, making it more attractive from an investment standpoint. Yet, the reality of the rental market in Sturbridge must be considered. With only 7.7% of the population being renters, the demand for rental properties is relatively low, which could affect the ability to consistently lease units at the FMR rate.
The N/A-day Days on Market (DOM) indicates that there isn't enough data to determine how quickly properties are typically rented out. This lack of information makes it challenging to predict the reliability of achieving the FMR rent. Therefore, while the FMR scenario offers a higher gross yield, the market rent scenario may be more realistic given the lower renter density.
In conclusion, the gross yield for a 2BR property under Section 8 in ZIP 01566 is approximately 4.66% using FMR and 4.57% using market rent. The choice between these rates should be made considering the local rental dynamics and the investor's risk tolerance.
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.