Location: Kennebec County, ME | Metro: Kennebec County, ME
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 | $1,090 |
| 1 Bedroom | $1,100 |
| 2 Bedrooms | $1,440 |
| 3 Bedrooms | $1,850 |
| 4 Bedrooms | $2,270 |
| 5 Bedrooms | $2,633 |
| 6 Bedrooms | $2,949 |
| 7 Bedrooms | $3,185 |
| 8 Bedrooms | $3,344 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,100 | $288,939 | 0.38% | F |
| 2BR | $1,440 | $344,301 | 0.42% | F |
| 3BR | $1,850 | $392,600 | 0.47% | F |
| 4BR | $2,270 | $435,931 | 0.52% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 04350, Litchfield, ME, reveals some interesting insights when comparing the Fair Market Rent (FMR) to the actual market rent figures. The annualized 2BR FMR for FY 2026 stands at $1,470, while the Census ACS indicates a market rent of $1,173 for the same property type.
To derive the gross yield, we first calculate the annual rental income based on these figures. For the FMR scenario, the annual rental income would be $1,470 multiplied by 12, equating to $17,640. Given the median home value of $352,079, the implied gross yield for a property listed at FMR is approximately 5%. This calculation is straightforward: divide the annual rental income by the median home value, then multiply by 100 to get the percentage.
In contrast, using the market rent figure of $1,173, the annual rental income would be $14,076. With the same median home value of $352,079, the implied gross yield under market conditions is roughly 4%. Again, this is derived by dividing the annual rental income by the median home value and multiplying by 100.
Evaluating these yields, it's important to consider the local context. Litchfield has a relatively low renter density of 3.3%, indicating that the majority of residents are homeowners rather than renters. This low density suggests that finding tenants willing to pay the higher FMR might be challenging, making the lower market rent yield of 4% more realistic.
The N/A-day Days on Market (DOM) figure implies that properties are either rented quickly or there isn't sufficient data to determine the average time it takes to rent out a property. In such a case, relying on the market rent figure provides a clearer picture of the rental dynamics in Litchfield. A 4% gross yield, while modest, aligns better with the local rental environment and the demographic preference for homeownership over renting.
Therefore, for investors looking to participate in the Section 8 program in Litchfield, the gross yield should realistically be expected to hover around 4%, rather than the 5% suggested by the FMR. This assessment is based solely on the provided data points and does not account for other factors such as operating expenses or vacancy rates that would influence the net operating income (NOI).
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.