Section 8 Fair Market Rent (FMR) for ZIP 02882 - 2027

Location: Providence-Fall River, RI | Metro: Providence-Fall River, RI-MA HUD Metro FMR Area

FY 2027 Fair Market Rent Rates

Unit Size	Monthly FMR
Studio	$1,890
1 Bedroom	$2,000
2 Bedrooms	$2,490
3 Bedrooms	$3,050
4 Bedrooms	$3,470
5 Bedrooms	$4,025
6 Bedrooms	$4,508
7 Bedrooms	$4,869
8 Bedrooms	$5,112

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

Population

13,091

Median Household Income

$95,721

Housing Units

9,050

Renter Percentage

30.6%

Occupancy Rate

63.4%

Renter Occupied

1,759

Housing Authorities Serving ZIP 02882

Town of Westerly Housing Authority (Westerly, RI) - 198 Section 8 vouchers
Narragansett Housing Authority (Narragansett, RI) - 186 Section 8 vouchers
South Kingstown Housing Authority (Peace Dale, RI) - 142 Section 8 vouchers

The Section 8 cap rate analysis for ZIP code 02882 in Narragansett, RI, reveals an interesting investment landscape. To begin, we annualize the Fair Market Rent (FMR) for a two-bedroom unit, which stands at $2210 per month for FY 2024, equating to an annual rent of $26,520. The Zillow Observed Rent Index (ZORI) for the same property type is $3,125 per month, or $37,500 annually.

Given the median home value of $852,993, we can calculate the gross yield for both scenarios. For the FMR scenario, the gross yield is approximately 3.11%, calculated by dividing the annual rent of $26,520 by the median home value of $852,993. In contrast, the ZORI scenario yields a gross return of about 4.40%, obtained by dividing the annual rent of $37,500 by the median home value.

The 30.6% renter density suggests that there is a moderate demand for rental properties in the area. However, the N/A-day DOM (Days on Market) indicates incomplete data regarding how quickly homes are rented out, which could imply variability in the rental market dynamics. Considering these factors, the ZORI-based gross yield of 4.40% appears more realistic for several reasons:

Rental Market Conditions: The higher ZORI figure reflects the actual market rents landlords can expect to receive, assuming they can find tenants willing to pay the going rate. This makes it a better indicator of potential income.
Investor Expectations: Small-portfolio investors typically seek properties that offer a competitive return relative to the local market conditions. Given the median home value, a gross yield of 4.40% aligns more closely with what investors might realistically achieve.
Section 8 Participation: While Section 8 provides a stable source of income, the lower FMR of $2210 does not fully capture the potential rental income in a market where the average rent is higher. Therefore, the FMR-based gross yield of 3.11% is likely conservative.

In summary, while the FMR-based gross yield of 3.11% is useful for understanding the minimum guaranteed income through Section 8, the ZORI-based gross yield of 4.40% offers a more accurate reflection of potential returns based on current market conditions. Landlords and investors should consider the ZORI figure when evaluating the profitability of properties in ZIP 02882.

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.