Location: Somerset County, ME | Metro: Franklin 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 | $1,140 |
| 1 Bedroom | $1,190 |
| 2 Bedrooms | $1,490 |
| 3 Bedrooms | $2,030 |
| 4 Bedrooms | $2,260 |
| 5 Bedrooms | $2,622 |
| 6 Bedrooms | $2,937 |
| 7 Bedrooms | $3,172 |
| 8 Bedrooms | $3,331 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,490 | $216,143 | 0.69% | D |
| 3BR | $2,030 | $264,758 | 0.77% | D |
U.S. Census Bureau data (2024)
The Section 8 cap-rate scenario for ZIP code 04961 in Lexington, ME, can be analyzed using the provided figures. The annualized Fair Market Rent (FMR) for a 2-bedroom apartment is set at $1,460 for FY 2026, based on metro rates. Meanwhile, the market rent, as per the Census ACS data, stands at $346 annually. Given the median home value of $213,191, we can calculate the implied gross yield for both the FMR and market rent scenarios.
First, let's consider the FMR scenario. With an annual rent of $1,460, the implied gross yield would be calculated as follows:
Next, we examine the market rent scenario. Using the annual rent of $346, the implied gross yield would be:
The significant difference between these two gross yields highlights the stark contrast between what the government pays through the Section 8 program versus what the market dictates. However, it's important to note that the FMR scenario assumes a higher renter density and a potentially more stable income stream due to government subsidies. In ZIP 04961, the renter density is stated as 5.6%, which is quite low, suggesting that relying solely on the FMR might be unrealistic if the number of potential renters is limited.
The N/A-day Days on Market (DOM) figure indicates that there isn't sufficient data to determine how long it typically takes to find a tenant, which adds another layer of uncertainty to the market rent scenario. Despite this, the market rent scenario provides a more grounded perspective on rental income, reflecting the actual demand and willingness to pay in the local housing market.
In conclusion, while the FMR scenario presents a higher gross yield of 0.69%, the lower renter density and lack of DOM data suggest that the market rent scenario, with a gross yield of 0.16%, offers a more realistic outlook for landlords and small-portfolio investors in ZIP 04961. This analysis underscores the importance of understanding local market conditions and the availability of tenants when considering investments in areas with limited rental activity.
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.