Location: Portsmouth-Rochester, NH | Metro: Boston-Cambridge-Quincy, MA-NH HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $2,130 |
| 1 Bedroom | $2,230 |
| 2 Bedrooms | $2,650 |
| 3 Bedrooms | $3,180 |
| 4 Bedrooms | $3,510 |
| 5 Bedrooms | $4,072 |
| 6 Bedrooms | $4,561 |
| 7 Bedrooms | $4,926 |
| 8 Bedrooms | $5,172 |
U.S. Census Bureau data (2024)
A decision tree for evaluating whether to purchase a property in ZIP code 03844 (Hampton Falls, NH) for Section 8 investment begins with understanding the Fair Market Rent (FMR) and how it aligns with financial obligations and market conditions.
1) Does FMR of $2760 cover debt service on a $901,599 property?
Yes: The FMR of $2760 is sufficient to cover the debt service on a $901,599 property. Assuming a conservative debt service coverage ratio (DSCR), which typically requires rental income to be at least 1.2 times the total debt service, the FMR meets this requirement. For instance, if the annual debt service is approximately $54,095 (based on a 6% interest rate over a 30-year mortgage), the FMR provides an annual income of $33,120, which is well below the required DSCR threshold. This indicates that the FMR can comfortably support the debt service of such a property.
No: If the debt service exceeds the FMR's capacity to cover it, then purchasing a property in ZIP 03844 for Section 8 would not be advisable. However, based on the provided FMR and assuming typical financing terms, this scenario does not apply.
2) Is market rent of $1,852 above, at, or below FMR?
Above: If the market rent were above the FMR, it would suggest that the property could potentially generate higher income than what is covered under Section 8. However, since the market rent is $1,852, it is below the FMR of $2760, indicating that the market rent does not exceed the FMR.
At: This condition would mean the market rent equals the FMR. In ZIP 03844, this is not the case as the market rent is lower than the FMR.
Below: Given that the market rent of $1,852 is below the FMR of $2760, a landlord would benefit from renting to Section 8 tenants as they can charge up to the FMR, thereby increasing their rental income compared to market rates.
3) Are 13.5% renters and N/A-day days on the market (DOM) indicative of sufficient demand?
It Depends: With 13.5% of residents being renters, the demand for rental properties in ZIP 03844 is moderate. However, the lack of data on days on the market (DOM) makes it challenging to assess the speed at which rental units are occupied. If the DOM is low, it suggests strong demand, making it a favorable location for Section 8 investments. Conversely, if the DOM is high, it may indicate a slower rental market, which could pose challenges in maintaining occupancy rates.
In conclusion, ZIP 03844 offers a favorable environment for Section 8 investments due to the FMR covering debt service and exceeding market rent. However, the moderate rental population and unclear DOM data necessitate further investigation into local rental trends before making a final decision.
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.