Location: Boston-Cambridge-Quincy, MA | Metro: Boston-Cambridge-Quincy, 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 | $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 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,650 | $491,385 | 0.54% | F |
| 3BR | $3,180 | $586,008 | 0.54% | F |
| 4BR | $3,510 | $650,436 | 0.54% | F |
| 5BR | $4,072 | $736,027 | 0.55% | F |
U.S. Census Bureau data (2024)
A skeptical investor might question whether the Fair Market Rent (FMR) of $2,590 for ZIP 02126 in Boston, MA, for fiscal year 2024 will adequately cover the mortgage on a home valued at $601,427. To address this concern, let's consider the average monthly mortgage payment for a property priced at that level. Assuming a 30-year fixed-rate mortgage with an interest rate of around 4%, the monthly principal and interest payment would be approximately $2,900. This means that the FMR does not fully cover the mortgage payment, leaving a shortfall of roughly $310 per month.
The second objection is whether there is sufficient renter demand at 56.5% occupancy. While this percentage suggests a moderate level of demand, it is important to note that it is above the 50% threshold typically considered necessary for a healthy rental market. However, the data alone does not provide insight into the stability or growth potential of this demand over time. Investors should also consider factors such as population trends and economic conditions in the area to gauge future demand.
A final concern is whether Housing Choice Vouchers will keep pace with market rents, which are currently around $3,300. The voucher amount is set based on the FMR, which is lower than the market rent. This discrepancy indicates that voucher holders might struggle to afford units renting at market rates, potentially limiting their ability to participate in the rental market. It is worth noting that while vouchers do not cover the entire market rent, they still offer significant financial assistance to low-income households. Landlords accepting vouchers can benefit from a steady stream of income, albeit at a rate below the market average.
In summary, while the FMR in ZIP 02126 does not fully cover the mortgage on a home priced at $601,427, the occupancy rate suggests a reasonable level of demand. The gap between voucher amounts and market rents is a reality, but it does not necessarily preclude investment opportunities. Careful consideration of additional factors and a thorough understanding of local regulations and incentives can help mitigate these risks.
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.