Section 8 Fair Market Rent (FMR) for ZIP 01704 - 2027

FY 2027 Fair Market Rent Rates

To determine if you should buy in ZIP 01704 (Unknown, MA) for Section 8, follow these steps:

• Step 1: Debt Service Coverage: The Fair Market Rent (FMR) for ZIP 01704 in fiscal year 2024 is $2870. If this amount does not cover the debt service on the property you're considering, then the answer is no. You need to ensure that the rental income will at least meet your financial obligations.
• Step 2: Market Rent Comparison: Compare the FMR of $2870 to the market rent in the area. If the market rent is significantly higher than the FMR, it indicates that properties may be harder to rent under Section 8 due to lower rents. If the market rent is close to or below the FMR, it suggests that Section 8 tenants can pay competitive rates.
• Step 3: Demand Assessment: Evaluate the percentage of renters and the days on market (DOM) for vacant units. Without specific figures, it's challenging to provide a definitive answer. However, if the percentage of renters is high and the DOM is low, it signifies strong demand for rentals, which is favorable for Section 8 investments. Conversely, if there are fewer renters or longer DOM periods, it might indicate weaker demand, making the investment less attractive.

If you can confirm that the FMR covers the debt service, the market rent aligns with or is below the FMR, and there is sufficient demand from renters, then the answer is yes. You would be entering a market where Section 8 tenancy is financially viable. If any of these conditions are not met, it depends on other factors such as the potential for subsidies, the local housing authority's policies, and the overall economic outlook of the area.

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.