Location: Portsmouth-Rochester, NH | Metro: Portsmouth-Rochester, NH 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 | $1,450 |
| 1 Bedroom | $1,510 |
| 2 Bedrooms | $1,980 |
| 3 Bedrooms | $2,430 |
| 4 Bedrooms | $2,650 |
| 5 Bedrooms | $3,074 |
| 6 Bedrooms | $3,443 |
| 7 Bedrooms | $3,718 |
| 8 Bedrooms | $3,904 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,980 | $380,999 | 0.52% | F |
| 3BR | $2,430 | $448,050 | 0.54% | F |
| 4BR | $2,650 | $459,974 | 0.58% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate picture for ZIP 03835, Farmington, NH, can be derived by comparing the Federal Market Rent (FMR) and the Zillow Observed Rent Index (ZORI) against the median home value. For a two-bedroom property, the annualized FMR for FY 2024 is $1640, while the ZORI for the same property type is $1,946.
To calculate the implied gross yield for the FMR scenario, we use the formula: Gross Yield = (Annual Rent / Median Home Value) * 100. Plugging in the numbers, the implied gross yield is ($1640 / $416,791) * 100, which equals approximately 0.39%. For the ZORI scenario, the implied gross yield is ($1,946 / $416,791) * 100, equating to about 0.47%.
The 22.2% renter density suggests that there is a significant portion of the population that might rely on rental assistance programs such as Section 8. However, the N/A-day DOM (Days on Market) indicates that properties in this area may sell quickly, without providing insight into the typical rental market dynamics. Given these conditions, the FMR-based gross yield of 0.39% is more reflective of the reality faced by landlords participating in the Section 8 program. This lower yield is due to the capped rent rates set by the government, which do not necessarily align with market rents.
In contrast, the higher gross yield of 0.47%, based on the ZORI, represents what landlords could potentially achieve if they were able to charge market rates. However, it's important to note that the FMR rate is typically lower than the market rate, and therefore, the 0.39% gross yield is more likely to be the actual return for landlords who accept Section 8 tenants. This calculation provides a clear benchmark for investors considering whether to participate in the Section 8 program or aim for market-rate rentals.
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.