Section 8 Fair Market Rent (FMR) for ZIP 01970 - 2027

Investment Score for ZIP 01970

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: 2026-08-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
1BR	$2,230	$372,953	0.6%	F
2BR	$2,650	$522,177	0.51%	F
3BR	$3,180	$662,882	0.48%	F
4BR	$3,510	$754,548	0.47%	F
5BR	$4,072	$928,874	0.44%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 01970 (Salem, MA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for Salem, MA, in ZIP code 01970, is set by HUD for the year 2026. The FMRs are as follows: - 0BR: $2040 - 1BR: $2160 - 2BR: $2560 - 3BR: $3080 - 4BR: $3390 These figures represent the maximum amount that a Section 8 voucher holder can pay towards rent. However, it is important to note that these FMRs are significantly lower than the actual rental prices in the area. For instance, the Zillow median price for a 2BR property is $522,411, which translates to a monthly mortgage payment of approximately $2,484 based on a 4.5% interest rate over a 30-year term. This is already above the FMR for a 2BR unit, indicating that voucher holders would struggle to find suitable housing within their budget. Additionally, the price-to-FMR ratio for a 2BR unit is 17.0x, meaning that the actual median rental price is about 17 times higher than the FMR. This suggests that landlords who accept Section 8 vouchers are likely to face significant financial constraints, as they cannot charge much above the FMR even if market conditions permit higher rents. #### Affordability & Renter Profile Salem, MA, has a population of 44,738, with 50.4% of residents being renters. This indicates a robust rental market, but the high occupancy rate of 94.3% suggests that there is little excess capacity, making it a tight market. Given the median household income of $85,041, the affordability of housing becomes a critical issue for many residents. The FMR for a 2BR unit is only 36.1% of the median income, which means that a significant portion of the population may find it difficult to afford housing without assistance. The high percentage of renters and the tight market conditions imply that competition for rental units is fierce. Voucher holders, who often have limited options due to the low FMR, may find it challenging to secure housing. Landlords might be hesitant to accept vouchers because of the potential for lower rental income compared to market rates. #### Investor Angle From an investor's perspective, the ZIP code 01970 presents both opportunities and challenges. The FMRs are set below the actual market rental prices, which means that landlords accepting Section 8 vouchers must rely on government subsidies to cover the difference between the FMR and the market rate. For example, the FMR for a 2BR unit is $2560, while the Zillow median price suggests a market rental value closer to $2,484 per month, excluding utilities and maintenance costs. Given the high price-to-FMR ratio, it is unlikely that an investor would achieve positive cash flow solely by renting properties at the FMR. To make a property cash-flow positive, an investor would need to either reduce expenses significantly or increase the FMR, which is not possible under current guidelines. Therefore, the investment grade for this ZIP code is relatively low, especially when considering the long-term financial sustainability of properties rented exclusively to Section 8 voucher holders. #### Specific Actionable Insights 1. **Target Properties Below Market Value**: Investors should focus on acquiring properties that are priced below the Zillow median values. For instance, a 2BR property priced around $450,000 could potentially offer a more manageable mortgage payment of approximately $2,025 per month, which is still above the FMR but closer to it. This would help mitigate some of the financial risks associated with renting to voucher holders. 2. **Consider Mixed-Income Developments**: Given the tight market conditions and the high price-to-FMR ratio, developing mixed-income housing projects could be a viable strategy. By including a mix of Section 8 units and market-rate units, investors can balance the lower rental income from voucher holders with higher income from other tenants. This approach can also help attract a broader range of residents, improving the overall desirability of the development. 3. **Engage with Local Housing Authorities**: Building relationships with local housing authorities can provide valuable insights into the demand for Section 8 units and potential strategies for maximizing occupancy. Additionally, understanding the specific requirements and processes involved in becoming a Section 8 landlord can help streamline operations and reduce administrative overhead. #### Bottom Line For Section 8-focused investors, the ZIP code 01970 presents a challenging environment due to the high price-to-FMR ratio and tight market conditions. While there is a significant number of renters, the financial constraints imposed by the FMR make it difficult to achieve positive cash flow. Therefore, the recommendation for investors is to **Skip** this ZIP code unless they can acquire properties at significantly reduced prices or implement a mixed-income development strategy. The current market dynamics suggest that the risk outweighs the reward for purely Section 8 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.