Location: Windsor County, VT | Metro: Orange County, VT
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,500 |
| 1 Bedroom | $1,510 |
| 2 Bedrooms | $1,770 |
| 3 Bedrooms | $2,310 |
| 4 Bedrooms | $2,420 |
| 5 Bedrooms | $2,807 |
| 6 Bedrooms | $3,144 |
| 7 Bedrooms | $3,396 |
| 8 Bedrooms | $3,566 |
U.S. Census Bureau data (2024)
A landlord considering purchasing a property in ZIP code 05068 (VT) for Section 8 purposes should follow this decision tree:
1) Does FMR $1,540 (metro FY 2026) clear debt service on a $367,358 property?
It depends. To determine if the Fair Market Rent (FMR) of $1,540 can cover the debt service on a property priced at $367,358, you must calculate the expected monthly mortgage payment. Assuming a 30-year fixed-rate mortgage at an average interest rate of 4.5%, the monthly mortgage payment would be approximately $1,820. This figure exceeds the FMR, indicating that the FMR alone would not cover the debt service. However, landlords can often qualify for additional subsidies or consider other income streams such as parking fees or laundry services.
2) Is market rent $1,097 (Census ACS) above, at, or below FMR?
The market rent of $1,097 is below the FMR of $1,540. This suggests that landlords participating in the Section 8 program could potentially receive higher rents compared to the local market rates, which might help offset some of the financial risks associated with the investment.
3) Are 30.0% renters + N/A-day days on market (DOM) enough demand?
Yes, but with caveats. With 30.0% of the population being renters, there is a reasonable level of rental demand. However, the lack of data on days on market (DOM) makes it difficult to assess how quickly properties are rented out. Landlords should investigate further to understand the local rental market dynamics and vacancy rates.
If the FMR does not clear debt service and the market rent is significantly lower, a landlord might face challenges in making the investment profitable without additional subsidies or income sources. The presence of a substantial rental market, however, provides a stable tenant pool for Section 8 properties, reducing the risk of prolonged vacancies.
To conclude, a landlord should proceed cautiously when considering ZIP 05068 for Section 8 investments due to the potential mismatch between FMR and debt service costs. However, the market conditions suggest that there is enough demand to support these properties, especially with the higher FMR compared to local market rents.
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.