Location: Lawrence, MA | Metro: Lawrence, MA-NH 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 | $1,760 |
| 1 Bedroom | $1,900 |
| 2 Bedrooms | $2,490 |
| 3 Bedrooms | $2,970 |
| 4 Bedrooms | $3,270 |
| 5 Bedrooms | $3,793 |
| 6 Bedrooms | $4,248 |
| 7 Bedrooms | $4,588 |
| 8 Bedrooms | $4,817 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,490 | $434,138 | 0.57% | F |
| 3BR | $2,970 | $546,938 | 0.54% | F |
| 4BR | $3,270 | $584,081 | 0.56% | F |
| 5BR | $3,793 | $664,799 | 0.57% | F |
U.S. Census Bureau data (2024)
A skeptical investor looking into ZIP 01843, Lawrence, MA, might have several concerns regarding the feasibility of investing in rental properties under Section 8. Here's how the data addresses those points:
The first objection often raised is whether the Fair Market Rent (FMR) of $1800 for ZIP 01843 in fiscal year 2024 will sufficiently cover the mortgage on a home valued at $526,417. To evaluate this, consider that the typical mortgage payment for a property priced around $526,417 could range widely depending on interest rates, down payments, and loan terms. Assuming a conservative 4% interest rate and a 20% down payment, the monthly mortgage payment could be approximately $2400. This means the FMR of $1800 falls short by about $600 per month. However, it's important to note that the FMR is a guideline, and actual rents can vary. Additionally, the cost of ownership includes maintenance, taxes, and insurance, which must also be factored into the budget.
Another concern is the level of renter demand, given the occupancy rate stands at 68.1%. While this figure indicates a moderate demand, it's essential to understand that an occupancy rate below 70% does not necessarily mean low demand. Lawrence, MA, has a diverse population, and the demand for affordable housing can be strong. The occupancy rate reflects the balance between supply and demand and suggests that there are opportunities for investors willing to meet the needs of tenants seeking affordable housing options.
The final objection pertains to the ability of Section 8 vouchers to keep up with market rents, which are currently at $2,388. The gap between the FMR and the market rent is significant, at nearly $600. This discrepancy poses a challenge for landlords, as they must decide whether to accept lower rent payments or risk vacancies. It's crucial to monitor local housing authority policies and federal funding levels to anticipate any adjustments to voucher amounts. In some cases, landlords might find it beneficial to seek additional sources of income, such as charging for utilities, to bridge the gap.
In conclusion, while the data presents some challenges for investors considering Section 8 properties in ZIP 01843, it also highlights potential strategies to mitigate these risks. Careful planning and an understanding of the local market dynamics can lead to successful investments.
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.