Section 8 Fair Market Rent (FMR) for ZIP 01844 - 2027

Investment Score for ZIP 01844

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	$1,740
1 Bedroom	$1,870
2 Bedrooms	$2,450
3 Bedrooms	$2,920
4 Bedrooms	$3,220
5 Bedrooms	$3,735
6 Bedrooms	$4,183
7 Bedrooms	$4,518
8 Bedrooms	$4,744

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
1BR	$1,870	$304,229	0.61%	D
2BR	$2,450	$485,062	0.51%	F
3BR	$2,920	$629,669	0.46%	F
4BR	$3,220	$734,203	0.44%	F
5BR	$3,735	$773,466	0.48%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 01844 (Methuen, MA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) figures for ZIP code 01844, as set by HUD for 2026, range from $1590 for a zero-bedroom unit to $3060 for a four-bedroom unit. For a two-bedroom unit, which is the most common type in the rental market, the FMR is $2310. This amount represents 24.5% of the median household income in Methuen, indicating that it is a relatively affordable rent compared to local incomes. However, the actual rental market in Methuen is significantly more expensive. The Zillow median price for a two-bedroom unit is $473,058, which translates to a monthly mortgage payment of approximately $2,150 assuming a 30-year fixed-rate mortgage at a 4.5% interest rate. This means that the price-to-FMR ratio for a two-bedroom unit is about 17.1x, indicating that the actual cost of renting is much higher than the FMR. Consequently, voucher holders face significant constraints in finding units that fall within their budget. They would need to find properties that are priced below the FMR, which could be challenging given the high actual rental prices. #### Affordability & Renter Profile The population of Methuen is 53,420, and 27.7% of the residents are renters. The occupancy rate is quite high at 97.4%, suggesting that the rental market is tight and there is strong demand for housing. With a median household income of $113,212, the typical resident has a relatively high income, but the rental market is still quite competitive. The FMR for a two-bedroom unit at $2310 is only a fraction of the median income, making it more affordable for those who can secure a voucher. However, the actual rental prices are far above the FMR, meaning that many renters without vouchers would struggle to afford housing in this area. Given the high occupancy rate and the significant gap between FMR and actual rental prices, it is likely that the rental market is undersupplied, particularly for affordable units. This tight market condition makes it difficult for low-income families to find suitable housing, even with the assistance of Section 8 vouchers. #### Investor Angle From an investor's perspective, the ZIP code 01844 presents both opportunities and challenges. The FMR for a two-bedroom unit is $2310, while the actual median rental price is much higher. If an investor were to purchase a property at the Zillow median price of $473,058 and rent it out at the FMR, they would likely incur a loss on the mortgage payment alone. Assuming a 20% down payment, the monthly mortgage payment would be around $2,150, leaving little room for profit after accounting for maintenance, insurance, and other costs. Therefore, the ZIP code is not cash-flow positive at the FMR level. This suggests that the investment grade for Section 8-focused investors is low. The high price-to-FMR ratio indicates that the market is not aligned with the financial support provided by Section 8 vouchers, making it less attractive for investors looking to generate positive cash flow. #### Specific Actionable Insights 1. **Target Affordable Units**: Investors should focus on acquiring properties that are priced below the Zillow median but still within the FMR range. For example, a two-bedroom unit priced at $2,500 per month would be more affordable for voucher holders and could potentially generate a small profit after expenses. 2. **Consider Smaller Units**: Given the high price-to-FMR ratio, smaller units like zero-bedroom or one-bedroom apartments might offer better opportunities for cash flow. These units have lower FMRs ($1590 and $1760 respectively), and if purchased at a lower price point, they could provide a more manageable financial situation for investors. 3. **Explore Government Incentives**: Investors should look into government incentives and programs designed to encourage the development of affordable housing. These programs might include tax credits, grants, or subsidies that could offset some of the financial losses associated with renting at FMR levels. #### Bottom Line Based on the analysis, the recommendation for Section 8-focused investors is to **skip** this ZIP code. The high actual rental prices relative to the FMR make it difficult to achieve positive cash flow, and the tight market conditions suggest limited availability of affordable units. While there may be opportunities in smaller units or through government incentives, the overall market dynamics in Methuen do not favor investors seeking to rely solely on Section 8 vouchers for profitability.

Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.