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 | $1,510 |
| 1 Bedroom | $1,610 |
| 2 Bedrooms | $2,000 |
| 3 Bedrooms | $2,450 |
| 4 Bedrooms | $2,780 |
| 5 Bedrooms | $3,225 |
| 6 Bedrooms | $3,612 |
| 7 Bedrooms | $3,901 |
| 8 Bedrooms | $4,096 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,610 | $381,914 | 0.42% | F |
| 2BR | $2,000 | $525,463 | 0.38% | F |
| 3BR | $2,450 | $734,299 | 0.33% | F |
| 4BR | $2,780 | $1,091,113 | 0.25% | F |
| 5BR | $3,225 | $1,970,716 | 0.16% | F |
U.S. Census Bureau data (2024)
A skeptical investor looking at Charlestown, RI (ZIP 02813) might raise several concerns regarding the feasibility of investing in the area under the Section 8 program. Here, we address these concerns using available data.
Objection 1: Will Fair Market Rent (FMR) of $2040 (for ZIP 02813 in fiscal year 2024) cover the mortgage on a $684,611 home?
The FMR of $2040 is the maximum amount that HUD will pay for rental housing in the area. To determine if this covers the mortgage, one must consider the interest rate and loan terms. Assuming a typical 30-year fixed-rate mortgage at an average interest rate of around 5%, the monthly payment on a $684,611 home would be approximately $3695. This means that the FMR of $2040 falls short by over $1600 per month, indicating that additional income sources or a lower purchase price would be necessary to make the investment viable.
Objection 2: Is there enough renter demand at 8.0%?
The 8.0% figure likely refers to the percentage of households that receive some form of housing assistance. However, it's important to note that this does not directly translate to the percentage of households participating in the Section 8 program. The demand for affordable housing in Charlestown is moderate, but the low participation rate suggests that finding tenants could be challenging. Investors should look into the local rental market dynamics and possibly explore alternative affordable housing programs to supplement demand.
Objection 3: Will vouchers keep pace with market rents of $1374?
The voucher amount is set by HUD based on the FMR, which in this case is $2040. If the market rents are $1374, the voucher should theoretically cover the rent. However, landlords often face the challenge of covering costs that exceed the voucher amount, such as utilities and property management fees. In Charlestown, the gap between the FMR and market rents is significant, suggesting that landlords might need to subsidize a portion of the rent to attract tenants. It's also worth noting that voucher holders may have limited mobility due to the cap on what HUD pays, which could affect the pool of potential tenants.
In conclusion, while the data provides insight into the challenges and considerations of investing in Charlestown under the Section 8 program, it's clear that the FMR alone is insufficient to cover the mortgage on a home priced at $684,611. Additionally, the demand for Section 8 housing appears to be low, and landlords may need to adjust their expectations regarding covering all costs with the voucher amount.
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.