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 | $1,610 |
| 1 Bedroom | $1,700 |
| 2 Bedrooms | $2,120 |
| 3 Bedrooms | $2,600 |
| 4 Bedrooms | $2,950 |
| 5 Bedrooms | $3,422 |
| 6 Bedrooms | $3,833 |
| 7 Bedrooms | $4,140 |
| 8 Bedrooms | $4,347 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,120 | $449,245 | 0.47% | F |
| 3BR | $2,600 | $575,250 | 0.45% | F |
| 4BR | $2,950 | $660,017 | 0.45% | F |
U.S. Census Bureau data (2024)
In analyzing ZIP code 02825, located in Foster, Rhode Island, several key concerns arise for real estate investors considering the Section 8 program. One immediate objection is whether the Fair Market Rent (FMR) of $1,870 for the fiscal year 2024 will sufficiently cover the mortgage payments on a property valued at $549,280. To address this, let's consider that the typical mortgage payment for a home priced at $549,280, assuming a 20% down payment and a 30-year fixed-rate mortgage at an average interest rate, would be around $2,200. Thus, the FMR of $1,870 falls short by approximately $330 per month, indicating that additional income sources or a lower purchase price might be necessary.
A second concern is the level of renter demand, which stands at 8.0%. This percentage suggests that there is a relatively low demand for rental properties in Foster, RI. However, it is important to note that while 8.0% may seem modest, it still represents a significant number of potential tenants given the size of the local population. The key here is understanding the dynamics of the local housing market and identifying areas where demand could be higher, such as near schools or employment centers.
The third objection pertains to the ability of Housing Choice Vouchers to keep up with market rents, currently estimated at $1,509. While the voucher amount is designed to reflect the local market conditions, it can sometimes lag behind actual increases in rental costs. In Foster, RI, the voucher amount is set slightly below the market rent, which means landlords should expect to make a profit margin of around $361 per month. However, this assumes that the voucher amount remains stable and that the market rent does not increase significantly beyond the forecasted figure. Investors should monitor both the voucher amount and market rent trends closely to ensure they remain aligned.
While these points highlight some of the challenges in investing in ZIP 02825 through the Section 8 program, they also underscore the importance of thorough research and strategic planning. For instance, securing a property at a lower price point or finding ways to reduce mortgage payments could help bridge the gap between FMR and mortgage expenses. Additionally, focusing on areas with higher tenant demand can mitigate risks associated with the overall 8.0% demand rate. Lastly, maintaining a close eye on government funding for vouchers and local economic indicators will provide insight into future trends and potential adjustments in rental subsidies.
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.