Section 8 Fair Market Rent (FMR) for ZIP 01960 - 2027

Investment Score for ZIP 01960

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	$2,130
1 Bedroom	$2,230
2 Bedrooms	$2,650
3 Bedrooms	$3,180
4 Bedrooms	$3,510
5 Bedrooms	$4,072
6 Bedrooms	$4,561
7 Bedrooms	$4,926
8 Bedrooms	$5,172

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	$2,230	$370,053	0.6%	D
2BR	$2,650	$536,203	0.49%	F
3BR	$3,180	$712,582	0.45%	F
4BR	$3,510	$818,315	0.43%	F
5BR	$4,072	$920,901	0.44%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 01960 (Peabody, MA) #### Section 8 Voucher Dynamics In Peabody, MA (ZIP 01960), the Fair Market Rent (FMR) for a two-bedroom apartment is set at $2,560 for the year 2026. This amount represents 31.8% of the median household income of $96,501, indicating that it is relatively affordable for the average resident. However, the actual rental market price for a two-bedroom unit is significantly higher, with the Zillow median price being $530,192. The price-to-FMR ratio of 17.3x suggests that the actual rent prices far exceed the FMR, which could pose significant challenges for Section 8 voucher holders. For instance, a voucher holder would only be able to cover $2,560 of the monthly rent, leaving them to find properties willing to accept such a low rent, which is unlikely given the market dynamics. #### Affordability & Renter Profile The population of Peabody is 54,474, with 34.6% of residents being renters. This indicates a substantial demand for rental housing. The occupancy rate of 97.3% suggests that the rental market is quite tight, with very few vacant units available. Given the high median household income and the fact that 31.8% of it is allocated towards a two-bedroom apartment, it is clear that the area is primarily occupied by middle to upper-middle-class individuals. This demographic typically has the financial means to afford higher rent prices, making it challenging for lower-income families who rely on Section 8 vouchers to find suitable housing. #### Investor Angle From an investor’s perspective, the ZIP code 01960 presents a mixed picture. The FMR for a two-bedroom unit is $2,560, but the actual market rent is much higher. If an investor were to purchase a property at the Zillow median price of $530,192 and rent it out at the FMR, they would likely face negative cash flow due to the high cost of acquisition and maintenance. The price-to-FMR ratio of 17.3x implies that the investment grade for properties in this ZIP code is low if the goal is to achieve positive cash flow through Section 8 vouchers. Investors should consider other factors such as potential appreciation in property values and the ability to attract non-voucher tenants willing to pay market rates. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors might want to focus on smaller units like one-bedroom apartments, where the FMR is $2,160. While still challenging, these units may have a slightly better chance of attracting voucher holders, as the gap between FMR and market rent is less pronounced compared to larger units. 2. **Consider Non-Voucher Tenants**: Due to the tight rental market and high median household income, there is a strong possibility of finding tenants willing to pay market rates. Investors could consider renting to non-voucher tenants to ensure positive cash flow. For example, a two-bedroom unit rented at the market rate of approximately $4,400 per month (based on the Zillow median price and typical mortgage payments) would provide a much better return on investment. 3. **Explore Subsidized Housing Programs**: To make properties more accessible to lower-income families, investors might explore additional subsidized housing programs or partnerships with local government initiatives. This could help bridge the gap between the FMR and the actual market rent, making the investment more feasible for those relying on Section 8 vouchers. #### Bottom Line Given the high price-to-FMR ratio and the tight rental market in Peabody, MA (ZIP 01960), the recommendation for Section 8-focused investors is to **skip** this ZIP code. The disparity between FMR and market rent makes it difficult to achieve positive cash flow when relying solely on Section 8 vouchers. Instead, investors should look for areas with a more favorable price-to-FMR ratio and a less competitive rental market. Alternatively, they could consider investing in non-voucher rental properties to capitalize on the high median household income and strong demand for rental housing in the area.

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.