Section 8 Fair Market Rent (FMR) for ZIP 02137 - 2027

FY 2027 Fair Market Rent Rates

The analysis of the Section 8 cap rate for ZIP code 02137 in Massachusetts is limited by the lack of specific data points such as median home values, market rents, and precise metrics like renter density and days on market (DOM). However, we can still derive a rough picture based on the available Fair Market Rent (FMR) figures.

The annualized FMR for a 2-bedroom apartment in ZIP 02137 for fiscal year 2024 is set at $2930. This figure represents the government's benchmark for rental assistance in the area. To calculate the implied gross yield, we would typically divide the annual rental income by the property's value. Without the median home value, we cannot provide an exact gross yield percentage for this scenario.

Market rent data is also unavailable for ZIP 02137, making it impossible to compare the gross yields between the FMR and market rent scenarios directly. The absence of market rent data could indicate that the housing market in this area is either stable or has insufficient data to determine market rates accurately.

Given the lack of information on median home values and market rent, the most reliable metric for estimating potential returns in this context is the FMR. However, the decision to use Section 8 tenants should consider factors beyond just the financials, such as the stability of rental income and the management requirements associated with Section 8 properties.

The implied gross yield from the FMR alone suggests a conservative approach to investment, especially if the median home value in the area is significantly higher. Investors should be cautious about relying solely on FMR without understanding how it compares to actual market rents. If market rents are substantially higher, the FMR might represent a lower gross yield, indicating that Section 8 participation could offer less attractive returns relative to other investment options.

Without specific data on renter density and DOM, it's difficult to assess the likelihood of finding and retaining tenants. However, the FMR provides a clear, government-backed minimum, which can serve as a baseline for investment decisions. For a more detailed analysis, acquiring local real estate market data would be necessary to understand the full scope of potential returns and risks.

Data Sources: FMR data from HUD (2027).

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.