Location: Westerly-Hopkinton-New Shoreham, 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 | $1,440 |
| 1 Bedroom | $1,440 |
| 2 Bedrooms | $1,890 |
| 3 Bedrooms | $2,400 |
| 4 Bedrooms | $2,840 |
| 5 Bedrooms | $3,294 |
| 6 Bedrooms | $3,689 |
| 7 Bedrooms | $3,984 |
| 8 Bedrooms | $4,183 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,440 | $342,658 | 0.42% | F |
| 2BR | $1,890 | $487,841 | 0.39% | F |
| 3BR | $2,400 | $619,448 | 0.39% | F |
| 4BR | $2,840 | $865,549 | 0.33% | F |
| 5BR | $3,294 | $2,713,842 | 0.12% | F |
U.S. Census Bureau data (2024)
A skeptical investor considering Westerly, RI (ZIP 02891), might raise several concerns regarding the feasibility of renting out properties under Section 8. Let's address these points directly using available data.
Objection 1: Will Fair Market Rent (FMR) of $1640 for the fiscal year 2024 cover the mortgage on a home valued at $621,593?
The FMR of $1640 is the maximum amount that HUD will pay for a rental unit in the area. To determine if this covers the mortgage, we need to consider the typical interest rates and loan terms. Assuming a 30-year fixed-rate mortgage with an interest rate of around 5%, the monthly payment on a $621,593 home would be approximately $3300. This is significantly higher than the FMR, indicating that relying solely on Section 8 payments would not cover the mortgage. Investors would likely need to seek additional income sources or have other financial means to support the shortfall.
Objection 2: Is there enough renter demand at 25.4%?
The 25.4% figure represents the percentage of households that are renters in Westerly, RI. While this is a notable portion of the housing market, it's essential to understand how this compares to the overall demand. In ZIP 02891, the total number of households is 10,700, meaning approximately 2,720 households are renters. The question of whether this is sufficient depends on the vacancy rate and competition among landlords. With limited data, we can assert that there is a substantial renter population, but the demand must be analyzed against supply to ensure profitability.
Objection 3: Will vouchers keep pace with market rents of $2,063?
The average market rent of $2,063 is notably higher than the FMR of $1640. Vouchers are intended to cover the gap between what a tenant can afford and the market rent, up to the FMR. This means that landlords would receive the difference between the tenant's contribution and $1640, but not the full $2,063. If the market continues to trend upwards, there is a risk that voucher amounts may not fully cover the increased costs, leading to potential losses for landlords. However, it's important to note that the voucher system aims to adjust annually based on local economic conditions and housing costs.
In summary, while there is a significant renter population in Westerly, RI, the FMR is insufficient to cover the mortgage on a $621,593 home, and vouchers will not fully compensate for the high market rents. These factors should be carefully considered when making investment decisions in this area.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). 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.