Location: Newport-Middleton-Portsmouth, RI | Metro: Newport-Middleton-Portsmouth, RI 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 | $1,880 |
| 1 Bedroom | $1,900 |
| 2 Bedrooms | $2,480 |
| 3 Bedrooms | $3,290 |
| 4 Bedrooms | $3,940 |
| 5 Bedrooms | $4,570 |
| 6 Bedrooms | $5,118 |
| 7 Bedrooms | $5,527 |
| 8 Bedrooms | $5,803 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,900 | $540,539 | 0.35% | F |
| 2BR | $2,480 | $775,163 | 0.32% | F |
| 3BR | $3,290 | $1,007,451 | 0.33% | F |
| 4BR | $3,940 | $1,336,130 | 0.29% | F |
| 5BR | $4,570 | $2,546,825 | 0.18% | F |
U.S. Census Bureau data (2024)
To decide whether to invest in ZIP 02840 (Newport, RI) for Section 8 properties, follow this decision tree:
1) Does FMR $2290 clear debt service on a $941,648 property?
No. The Fair Market Rent (FMR) of $2290 would not cover the debt service on a property valued at $941,648. Debt service typically includes mortgage payments, insurance, taxes, and maintenance costs. At this valuation, the monthly debt service would likely exceed $2290, making it unfeasible to rely solely on Section 8 rental income.
2) Is market rent $3,298 (ZORI) above, at, or below FMR?
Above. The Zillow Observed Rent Index (ZORI) for ZIP 02840 is $3,298, which is significantly higher than the FMR of $2290. This indicates that the market rent is well above the government-subsidized rate, suggesting that landlords might find it more profitable to seek tenants who can pay market rates.
3) Are 50.2% renters + N/A-day days on market (DOM) enough demand?
It depends. With 50.2% of residents being renters, there is a substantial rental market in Newport, RI. However, the lack of data on days on market (DOM) makes it difficult to assess how quickly units are rented. A low DOM would indicate strong demand, while a high DOM would suggest the opposite. Without this information, it's challenging to make a definitive statement about the demand for rental properties in ZIP 02840.
If the answer to question 1 is no, and the market rent (question 2) is above FMR, then investing in Section 8 properties in ZIP 02840 is generally not recommended unless you can find a property valued significantly lower than $941,648. The high market rent suggests that landlords could potentially earn more by renting to market-rate tenants. For question 3, if the DOM were known to be low, then despite the answers to the first two questions, the strong demand for rentals might still make ZIP 02840 an attractive investment for landlords willing to cater to the broader rental market.
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.