Location: Norwich-New London-Willimantic, CT | Metro: Hartford-West Hartford-East Hartford, CT MSA
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 | $1,200 |
| 1 Bedroom | $1,380 |
| 2 Bedrooms | $1,730 |
| 3 Bedrooms | $2,200 |
| 4 Bedrooms | $2,720 |
| 5 Bedrooms | $3,155 |
| 6 Bedrooms | $3,534 |
| 7 Bedrooms | $3,817 |
| 8 Bedrooms | $4,008 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,730 | $234,686 | 0.74% | D |
| 3BR | $2,200 | $280,495 | 0.78% | D |
| 4BR | $2,720 | $295,310 | 0.92% | C |
| 5BR | $3,155 | $322,147 | 0.98% | C |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 06226, Willimantic, CT, reveals a significant difference between the federal market rent (FMR) and the market rent (ZORI) for a two-bedroom property. The annualized FMR for a 2BR unit is $1510, while the ZORI stands at $1,950.
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 $1510 multiplied by 12 months, equating to $18,120. Given the median home value of $266,440, the implied gross yield from the FMR is approximately 6.8%. This is calculated by dividing the annual rental income by the median home value and multiplying by 100 to convert it into a percentage.
Next, we consider the ZORI figure. With an annualized market rent of $1,950 per month, the total annual rental income would be $23,400. Using the same median home value of $266,440, the gross yield derived from the ZORI is roughly 8.8%.
Given the 63.8% renter density in Willimantic, it is evident that there is a strong demand for rental properties. However, the N/A-day DOM (Days on Market) indicates that the data on how long properties typically remain unsold is unavailable, making it difficult to assess the ease of transitioning a property into a rental unit. Despite this, the higher gross yield of 8.8%, derived from the ZORI, is more reflective of the current market conditions and thus more realistic for potential investors. It suggests that while the FMR provides a baseline for subsidized rents, the actual market rent offers a better indication of what can be achieved in terms of yield for a rental property in this area.
In conclusion, the gross yield from the FMR is 6.8%, whereas the gross yield from the ZORI is 8.8%. Investors should focus on the latter figure when considering the potential returns from a rental property in ZIP 06226, as it aligns more closely with the prevailing market conditions and renter demand.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). 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.