Location: Newport-Middleton-Portsmouth, RI | Metro: Newport-Middleton-Portsmouth, RI HUD Metro FMR Area
| 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 |
U.S. Census Bureau data (2024)
In ZIP code 02841, the Section 8 program operates under specific economic guidelines that impact landlords and small-portfolio investors. The SAFMR (Small Area Fair Market Rent) for a two-bedroom apartment in this ZIP is set at $2280 for the fiscal year 2024. This SAFMR represents the maximum amount that the housing authority will pay for a unit in this area, ensuring that it aligns with the local rental market conditions.
The local market rent for a two-bedroom unit, according to Census ACS data, is $3,501. This means that landlords can expect to charge up to this amount, but the government's contribution under Section 8 is capped at $2280. To understand how much a landlord can realistically receive from a voucher, we need to factor in the tenant's portion and utility allowances.
The tenant is responsible for paying 30% of their adjusted income towards rent. For example, if a tenant has an adjusted monthly income of $1,500, they would contribute $450 toward the rent. The remaining balance is covered by the housing authority, up to the SAFMR limit. Additionally, the housing authority provides a utility allowance which varies based on the size of the unit and the region. In ZIP 02841, the utility allowance for a two-bedroom apartment is typically around $200 per month.
Thus, when a landlord receives a Section 8 tenant, the total reimbursement received includes the tenant’s payment plus the housing authority’s subsidy, up to the SAFMR limit. If the total rent charged is $3,501, and the tenant contributes $450, the housing authority would cover $2280, leaving a shortfall of $771 per month. This is the difference between the market rent and the sum of the tenant's contribution and the housing authority's reimbursement.
The reimbursement gap in ZIP 02841 for a two-bedroom unit is therefore $771. Landlords should be aware of this gap and consider whether they are willing to accept a lower rental income compared to the market rate. Alternatively, if the market rent is less than the SAFMR, landlords might find themselves in a surplus situation where the housing authority's reimbursement exceeds the actual market rent.
For landlords operating in ZIP 02841, understanding these economic dynamics is crucial for making informed decisions about accepting Section 8 tenants. It's important to note that while the SAFMR is set specifically for this ZIP, it ensures a fair standard for both tenants and landlords, reflecting the unique rental market conditions of the area.
Data Sources: FMR data from HUD (2027). 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.