Location: Providence-Fall River, RI | Metro: Providence-Fall River, RI-MA 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 | $1,430 |
| 1 Bedroom | $1,520 |
| 2 Bedrooms | $1,890 |
| 3 Bedrooms | $2,320 |
| 4 Bedrooms | $2,630 |
| 5 Bedrooms | $3,051 |
| 6 Bedrooms | $3,417 |
| 7 Bedrooms | $3,690 |
| 8 Bedrooms | $3,875 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,890 | $454,128 | 0.42% | F |
| 3BR | $2,320 | $513,985 | 0.45% | F |
| 4BR | $2,630 | $576,076 | 0.46% | F |
| 5BR | $3,051 | $638,826 | 0.48% | F |
U.S. Census Bureau data (2024)
The Section 8 thesis in ZIP code 02726, located in Somerset, MA, revolves around the significant gap between the Fair Market Rent (FMR) and the actual market rent. The FMR for ZIP 02726 in fiscal year 2024 is set at $1,850, whereas the Census ACS reports an average market rent of $1,275. This creates a gap of $575 per month, which translates to a 45% difference between the two figures.
Given that the FMR exceeds the market rent, landlords and small-portfolio investors can leverage this discrepancy to maximize their returns. Voucher tenants provide a guaranteed source of income through the Housing Choice Voucher program, ensuring timely payments at a rate higher than the current market. This makes the ZIP code a yield play, where investors can earn more than they would from typical market-rate tenants while minimizing the risk of non-payment.
Somerset, MA has a relatively low rental population of 14.6%, indicating that most residents own their homes. The median home value in the area is $505,589, suggesting a mix of modest and middle-income homeowners. The median household income of $111,046 supports the idea that many local residents might find it challenging to afford higher rents, making the lower market rent a reflection of the economic realities of the region.
The cost of housing voucher tenants below open-market rates is minimal when considering the broader benefits. Landlords receive federal subsidies that cover the difference between the tenant's contribution and the FMR, effectively capping their loss. In ZIP 02726, landlords can expect to receive $1,850 per month from the voucher program, even if the market suggests a lower rate. This financial guarantee allows investors to secure a steady income stream that aligns with the FMR, despite the prevailing market conditions.
In conclusion, the gap between FMR and market rent in ZIP 02726 presents a compelling opportunity for landlords and small-portfolio investors. By accepting voucher tenants, they can capitalize on a higher yield play, backed by federal subsidies, without bearing the full brunt of the lower market rates. The economic context of Somerset, MA, further justifies this strategy, as it aligns with the income levels and housing values of the area.
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.