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 | $1,970 |
| 1 Bedroom | $1,980 |
| 2 Bedrooms | $2,590 |
| 3 Bedrooms | $3,440 |
| 4 Bedrooms | $4,110 |
| 5 Bedrooms | $4,768 |
| 6 Bedrooms | $5,340 |
| 7 Bedrooms | $5,767 |
| 8 Bedrooms | $6,055 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,980 | $513,472 | 0.39% | F |
| 2BR | $2,590 | $635,515 | 0.41% | F |
| 3BR | $3,440 | $736,120 | 0.47% | F |
| 4BR | $4,110 | $998,976 | 0.41% | F |
| 5BR | $4,768 | $1,524,756 | 0.31% | F |
U.S. Census Bureau data (2024)
The rent math in ZIP 02842, located in Middletown, RI, does not align favorably with the Federal Market Rent (FMR) standards set for fiscal year 2024. The FMR is pegged at $2150, which is significantly lower than the market rent, known as ZORI, at $3,045. This discrepancy means that properties aiming to meet Section 8 criteria will have to reduce their rental rates by nearly 30%, making it less attractive for landlords and small-portfolio investors seeking market-rate returns.
Acquisition of homes in this ZIP code is not particularly affordable. With a median home value of $742,991, the cost of entry is high. Additionally, the lack of data on days on market (DOM) and the low price-cut share of 0.2% suggest that the housing market is robust and resistant to significant price reductions, further complicating the acquisition process for those looking to invest in Section 8 properties.
Tenant demand in ZIP 02842 is present but not overwhelming. The area has a total population of 16,832, with 42.1% of residents being renters. While this indicates a substantial number of potential tenants, the high median home value suggests that the rental market might be segmented towards higher-end units, which could be challenging for Section 8 vouchers given their lower payment standard.
Given these factors, investing in ZIP 02842 under Section 8 guidelines presents several challenges. The rent math does not work in favor of landlords due to the significant gap between FMR and market rents. Acquisition costs are high, and the market shows little flexibility in pricing, reducing the feasibility of finding affordable properties. Although tenant demand exists, the high median home value may limit the suitability of rental units for Section 8 participants. Overall, the ZIP code is not ideal for Section 8 investments, and investors should consider other areas with more favorable conditions.
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.