Location: Portsmouth-Rochester, NH | Metro: Western Rockingham County, 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 | $1,580 |
| 1 Bedroom | $1,700 |
| 2 Bedrooms | $2,220 |
| 3 Bedrooms | $2,770 |
| 4 Bedrooms | $2,980 |
| 5 Bedrooms | $3,457 |
| 6 Bedrooms | $3,872 |
| 7 Bedrooms | $4,182 |
| 8 Bedrooms | $4,391 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,220 | $474,400 | 0.47% | F |
| 3BR | $2,770 | $566,915 | 0.49% | F |
| 4BR | $2,980 | $643,498 | 0.46% | F |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 03884 in Strafford, NH, reveals an interesting scenario when comparing federally determined Fair Market Rents (FMRs) to actual market rents. For a two-bedroom apartment, the annualized FMR set by the federal government for FY 2024 is $1860, while the Census ACS indicates a market rent of $1,635 per month.
To calculate the implied gross yield, we first need to annualize these figures. The annualized FMR for a two-bedroom unit is $1860 * 12 = $22,320. Given the median home value in the area is $533,862, the implied gross yield based on the FMR would be approximately 4.18%. This is derived by dividing the annualized FMR ($22,320) by the median home value ($533,862).
On the other hand, the market rent for a two-bedroom unit is $1,635 per month, which annualizes to $19,620. Using the same median home value of $533,862, the implied gross yield based on market rent is about 3.67%. This is calculated by dividing the annualized market rent ($19,620) by the median home value ($533,862).
Given that only 6.5% of the population are renters, it's important to consider how this impacts the likelihood of achieving either the FMR or the market rent. Additionally, the N/A-day DOM (days on market) suggests there might be some variability or lack of consistent data regarding rental listings, which could affect the reliability of the market rent figure.
The difference between the FMR-based gross yield and the market rent-based gross yield is significant, with the FMR yielding a higher return at 4.18% compared to the market rent's 3.67%. However, the lower renter density and the uncertainty around DOM suggest that landlords should be cautious about relying solely on the FMR to project future rental income. In practice, the market rent figure is likely more reflective of what landlords can realistically expect, despite the higher potential yield offered by the FMR.
In conclusion, while the federally set FMR provides a benchmark for rental assistance, the actual market conditions in ZIP 03884 indicate that landlords may need to adjust their expectations downward to align with the prevailing market rent. This means that a gross yield closer to 3.67% is more practical for long-term investment planning in this area.
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.