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 | $1,380 |
| 1 Bedroom | $1,460 |
| 2 Bedrooms | $1,820 |
| 3 Bedrooms | $2,230 |
| 4 Bedrooms | $2,530 |
| 5 Bedrooms | $2,935 |
| 6 Bedrooms | $3,287 |
| 7 Bedrooms | $3,550 |
| 8 Bedrooms | $3,728 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,460 | $331,538 | 0.44% | F |
| 2BR | $1,820 | $387,965 | 0.47% | F |
| 3BR | $2,230 | $478,082 | 0.47% | F |
| 4BR | $2,530 | $604,409 | 0.42% | F |
| 5BR | $2,935 | $568,545 | 0.52% | F |
U.S. Census Bureau data (2024)
A skeptical investor considering ZIP 02816 (Coventry, RI) for Section 8 investments might raise several valid concerns. Here are the key objections addressed with the available data.
Objection 1: Will FMR $1750 (zip FY 2024) cover the mortgage on a $446,975 home?
The Fair Market Rent (FMR) for ZIP 02816 in fiscal year 2024 is set at $1750. To determine if this will sufficiently cover the mortgage, we must consider typical interest rates and loan terms. Assuming a 30-year fixed-rate mortgage at an average rate of 5%, the monthly mortgage payment on a $446,975 home would be approximately $2,378. This amount exceeds the FMR by over $600 per month. Therefore, relying solely on FMR to cover mortgage payments would leave a significant shortfall. Investors should consider additional income sources or lower-cost properties to meet their financial goals.
Objection 2: Is there enough renter demand at 19.0%?
The rental demand in ZIP 02816 stands at 19.0%. While this percentage indicates that nearly one-fifth of the population is looking for rental housing, it is essential to evaluate whether this level of demand can sustain a Section 8 investment. The 19.0% figure suggests a moderate demand but does not provide insights into the specific demand for subsidized housing. Additionally, the data does not indicate the vacancy rate or competition from other rental properties. To confidently invest, one would need more detailed information on the number of Section 8 tenants actively seeking housing and the local vacancy rates.
Objection 3: Will vouchers keep pace with $2,045 market rents?
The average market rent in ZIP 02816 is $2,045. The FMR of $1750 is below this figure, which means that landlords might face challenges in covering the full cost of renting out their properties through Section 8 alone. However, the Housing Choice Voucher program aims to ensure that voucher amounts reflect the local market conditions. If the voucher amount is insufficient, landlords could negotiate with tenants to cover the difference, though this practice varies by state and locality. It's also worth noting that the FMR is adjusted annually based on changes in the local rental market, so future adjustments may bring the voucher closer to the market rent.
In summary, while ZIP 02816 presents opportunities for Section 8 investments, the data highlights some challenges. The FMR falls short of covering the mortgage on a median-priced home, indicating the need for careful financial planning. The rental demand percentage is moderate but lacks specificity regarding subsidized housing needs. Lastly, the gap between FMR and market rents poses a risk, though annual adjustments to FMR could mitigate this issue over time. Investors should proceed with caution and seek additional local data to make informed decisions.
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.