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 | $1,290 |
| 1 Bedroom | $1,480 |
| 2 Bedrooms | $1,850 |
| 3 Bedrooms | $2,200 |
| 4 Bedrooms | $2,430 |
| 5 Bedrooms | $2,819 |
| 6 Bedrooms | $3,157 |
| 7 Bedrooms | $3,410 |
| 8 Bedrooms | $3,581 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,850 | $323,277 | 0.57% | F |
| 3BR | $2,200 | $455,268 | 0.48% | F |
| 4BR | $2,430 | $570,123 | 0.43% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 06231, Hebron, Connecticut, reveals some interesting dynamics when comparing the Fair Market Rent (FMR) and market rent figures. For a two-bedroom unit, the annualized FMR for FY 2024 is set at $1620, while the Census ACS reports a market rent of $1,378.
To derive the gross yield for the FMR scenario, we calculate $1620 multiplied by 12 months, yielding an annual rental income of $19,440. Dividing this by the median home value of $454,414 gives us an implied gross yield of approximately 4.3%. In contrast, using the market rent figure of $1,378 per month, the annual rental income is $16,536, resulting in an implied gross yield of about 3.6% when divided by the median home value.
The higher gross yield associated with the FMR scenario suggests that properties participating in the Section 8 program could generate a better return on investment compared to those rented at market rates. However, it's important to consider the broader context of the local rental market. With a renter density of only 9.0%, the demand for rental properties, including those in the Section 8 program, is relatively low. This implies that landlords might face challenges in finding tenants willing to pay the FMR rate, especially if they are not familiar with the Section 8 program or are hesitant due to the bureaucratic process involved.
The N/A-day DOM (Days on Market) indicates incomplete data, which could mean that there isn't sufficient information on how quickly properties are typically leased in this area. Despite this gap, the lower gross yield from market rents reflects the reality of the current rental environment in Hebron, where landlords might struggle to command higher rents due to limited demand.
In conclusion, while the FMR-based gross yield of 4.3% appears more attractive than the market rent-based gross yield of 3.6%, the actual performance for landlords and small-portfolio investors is likely to be closer to the latter, considering the low renter density and potential difficulties in attracting tenants. Investors should weigh these factors carefully when evaluating the potential returns from Section 8 properties in ZIP 06231.
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.