Section 8 Fair Market Rent (FMR) for ZIP 02740 - 2027

Investment Score for ZIP 02740

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	$1,230
1 Bedroom	$1,240
2 Bedrooms	$1,580
3 Bedrooms	$1,880
4 Bedrooms	$2,390
5 Bedrooms	$2,772
6 Bedrooms	$3,105
7 Bedrooms	$3,353
8 Bedrooms	$3,521

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
2BR	$1,580	$383,359	0.41%	F
3BR	$1,880	$432,821	0.43%	F
4BR	$2,390	$452,072	0.53%	F
5BR	$2,772	$548,295	0.51%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

Market Analysis for ZIP Code 02740 (New Bedford, MA) 1. **Section 8 Voucher Dynamics** The Fair Market Rent (FMR) for ZIP code 02740 is set by HUD for the year 2026. The FMRs are as follows: - 0BR: $1160 - 1BR: $1180 - 2BR: $1470 (which is 31.9% of the median household income) - 3BR: $1760 - 4BR: $2200 These FMRs represent the maximum amount that a Section 8 voucher holder can pay for rent. However, comparing these figures to actual rental prices provides insight into the dynamics of the market. For example, the Zillow median price for a 2BR home in New Bedford is $371,815, which translates to a monthly mortgage payment of approximately $1760 based on typical financing terms. This suggests that actual rental prices are likely higher than the FMRs. Given that the FMR for a 2BR unit is only $1470, while the mortgage payment could be around $1760, landlords who accept Section 8 vouchers face a significant shortfall. The price-to-FMR ratio of 21.1x for a 2BR unit indicates that the actual market rent is much higher than the FMR, making it challenging for voucher holders to find suitable housing. 2. **Affordability & Renter Profile** With a median household income of $55,237 and a renter population of 60.4%, the majority of residents in New Bedford rely on rental housing. The affordability of housing is a critical issue, especially for those who receive Section 8 assistance. A 2BR unit's FMR represents only 31.9% of the median household income, suggesting that even with the subsidy, many renters still struggle to afford housing. The occupancy rate of 95.4% indicates a relatively tight market where most units are occupied, leaving little room for new entrants. This high occupancy rate also implies that there is strong demand for rental properties, but the supply may not meet the needs of all renters, particularly those with limited financial resources. 3. **Investor Angle** For investors focusing on Section 8 properties, the cash flow potential must be carefully evaluated. Given the FMRs and the actual market prices, the cash flow is likely negative unless investors can secure additional subsidies or manage costs effectively. For instance, a 2BR unit with a Zillow median price of $371,815 would have a monthly mortgage payment of about $1760, assuming a 4.5% interest rate and a 30-year fixed mortgage. If the landlord accepts a Section 8 voucher, they would only receive $1470 per month, resulting in a shortfall of $290 per month. This shortfall must be considered against other operating expenses such as property taxes, insurance, maintenance, and utilities. The investment grade for this ZIP code would be low due to the negative cash flow potential and the challenges in finding tenants willing to accept the lower FMR rates. Additionally, the high price-to-FMR ratio suggests that the market is overpriced relative to what voucher holders can afford, further complicating the investment scenario. 4. **Specific Actionable Insights** - **Focus on Smaller Units**: Given the high price-to-FMR ratio, smaller units like 0BR or 1BR might offer better opportunities for positive cash flow. For example, a 1BR unit with a Zillow median price of around $250,000 would have a monthly mortgage payment of approximately $1250. Accepting a Section 8 voucher at $1180 would result in a shortfall of only $70 per month, which is more manageable compared to larger units. - **Seek Additional Subsidies**: Investors should explore additional government programs or local subsidies that can help bridge the gap between the FMR and the actual market rent. This could include state-level housing assistance programs or tax incentives for landlords who accept Section 8 vouchers. - **Consider Location-Specific Strategies**: Within ZIP code 02740, certain neighborhoods might have lower rental prices due to varying demand levels. Identifying these areas could provide opportunities for more affordable investments and potentially positive cash flow. 5. **Bottom Line** Based on the analysis, the recommendation for Section 8-focused investors in ZIP code 02740 is to **Skip** this market. The high price-to-FMR ratio and the tight rental market make it difficult to achieve positive cash flow. While there are some actionable insights, the overall investment climate is not favorable for those relying solely on Section 8 vouchers to cover rental costs.

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.