Section 8 Fair Market Rent (FMR) for ZIP 02909 - 2027

Investment Score for ZIP 02909

Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)

FY 2027 Fair Market Rent Rates

Unit Size	Monthly FMR
Studio	$1,470
1 Bedroom	$1,560
2 Bedrooms	$1,940
3 Bedrooms	$2,380
4 Bedrooms	$2,700
5 Bedrooms	$3,132
6 Bedrooms	$3,508
7 Bedrooms	$3,789
8 Bedrooms	$3,978

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
1BR	$1,560	$298,646	0.52%	F
2BR	$1,940	$349,442	0.56%	F
3BR	$2,380	$391,423	0.61%	D
4BR	$2,700	$417,947	0.65%	D
5BR	$3,132	$525,815	0.6%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 02909 (Providence, RI) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 02909 is set by HUD for 2026. The FMRs are as follows: - 0BR: $1220 - 1BR: $1300 - 2BR: $1600 - 3BR: $1930 - 4BR: $2300 To understand how these FMRs compare to actual rents, we can look at the Zillow median price for a 2BR unit, which is $339,037. This translates into a monthly rent of approximately $1,775 based on a 5% annual rental yield. The actual rent is significantly higher than the FMR of $1600, indicating that voucher holders face substantial constraints. The price-to-FMR ratio of 17.7x suggests that the cost of owning a property far exceeds what a tenant could pay with a voucher, making it difficult for voucher holders to find affordable housing. #### Affordability & Renter Profile ZIP code 02909 has a population of 46,014, with 60.2% of residents being renters. This high percentage of renters indicates a strong demand for rental properties. However, the occupancy rate of 86.3% suggests that while there is a significant number of renters, the market is not oversupplied; there is still a considerable need for more rental units. Given the median household income of $64,649, the 2BR FMR of $1600 represents 29.7% of the median income. This implies that the majority of residents who rely on Section 8 vouchers are likely to be low-income households. The affordability gap is evident, with actual rents being much higher than the FMR, leading to a challenging situation for many residents. #### Investor Angle From an investor perspective, the key question is whether properties can generate positive cash flow at the FMR levels. Given the Zillow median price of $339,037 for a 2BR unit, the expected rental income based on a 5% yield would be around $1,775 per month. However, the FMR for a 2BR unit is only $1,600. This means that if an investor purchases a property at the median price, they would not be able to achieve positive cash flow at the FMR level. Additionally, the high price-to-FMR ratio of 17.7x indicates that the investment grade for properties in this ZIP code is relatively low. Investors focusing on Section 8 vouchers would need to consider properties priced below the median to ensure profitability. #### Specific Actionable Insights 1. **Focus on Lower Priced Properties**: To achieve positive cash flow, investors should target properties priced below the median. For instance, a 2BR property priced at $250,000 would generate a rental income of approximately $1,250 per month based on a 5% yield, which is closer to the FMR of $1,600. This strategy would help mitigate the risk of negative cash flow. 2. **Consider Smaller Units**: The FMR for smaller units (0BR and 1BR) is lower compared to larger units. A 1BR unit with an FMR of $1,300 might be more feasible for positive cash flow if purchased at a lower price point. Additionally, smaller units often have lower purchase costs, which can improve the overall investment grade. 3. **Explore Government Subsidies**: Given the high cost of ownership relative to rental income, investors might want to explore additional government subsidies or programs designed to support affordable housing. These subsidies could help bridge the gap between the FMR and the actual cost of ownership, potentially turning a negative cash flow scenario into a positive one. #### Bottom Line Based on the analysis, the recommendation for Section 8-focused investors in ZIP code 02909 is to **Skip** purchasing properties at the median price. The high price-to-FMR ratio and the limited ability to generate positive cash flow make this ZIP code less attractive for such investments. Instead, investors should focus on other areas where the FMR is closer to the actual rental prices, or seek out properties that are significantly below the median price to ensure profitability. ### Summary In ZIP code 02909, the high percentage of renters and the occupancy rate indicate a robust demand for rental properties. However, the significant disparity between the Zillow median price and the FMR makes it challenging for Section 8 voucher holders to find affordable housing. From an investment standpoint, the high price-to-FMR ratio suggests that properties in this ZIP code are not cash-flow positive at the FMR levels, especially when considering the median price. Therefore, investors should either seek out lower-priced properties or consider other ZIP codes with better alignment between FMR and actual rental prices.

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.