Location: Northeastern Connecticut Planning Region, CT | Metro: Northeastern Connecticut Planning Region, CT
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 | $1,100 |
| 1 Bedroom | $1,230 |
| 2 Bedrooms | $1,520 |
| 3 Bedrooms | $1,950 |
| 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 |
|---|---|---|---|---|
| 2BR | $1,520 | $359,003 | 0.42% | F |
| 3BR | $1,950 | $422,266 | 0.46% | F |
| 4BR | $2,270 | $485,008 | 0.47% | F |
U.S. Census Bureau data (2024)
A skeptical investor considering ZIP 06331, Canterbury, CT, might raise several valid concerns regarding the financial feasibility of investing in properties under the Section 8 program. Let's address these objections with the available data.
Objection 1: Will Fair Market Rent (FMR) of $1970 (for ZIP 06331 in fiscal year 2024) cover the mortgage on a $405,277 home?
The FMR of $1970 per month must be compared against the mortgage payment for a home priced at $405,277. Assuming a typical 30-year fixed-rate mortgage at an interest rate of around 5%, the monthly mortgage payment would be approximately $2100. This calculation shows that the FMR does not fully cover the mortgage payment, leaving a shortfall of $130 per month. However, it's important to note that property taxes and insurance, which are also part of the mortgage payment, can vary widely. Additionally, investors often factor in appreciation and potential rental income increases over time.
Objection 2: Is there enough renter demand at 11.3%?
The percentage of renter-occupied households at 11.3% suggests a relatively low demand for rental properties in Canterbury, CT. However, this figure alone does not provide a complete picture. The total number of households in the area is also crucial. With a smaller overall population, the absolute number of renters could still support a few Section 8 properties. Moreover, the demand for affordable housing can remain steady even when overall rental demand is low. It's advisable to conduct further research into the local rental market trends and the specific needs of the community.
Objection 3: Will vouchers keep pace with market rents of $924?
The current market rent of $924 is significantly lower than the FMR of $1970. This indicates that voucher holders can afford to pay more than the average market rent, potentially covering more of the mortgage costs. However, the question of whether vouchers will keep pace with increasing market rents over time is more complex. Historically, the Department of Housing and Urban Development (HUD) adjusts FMRs annually based on changes in the housing market. Investors should monitor these adjustments closely to ensure that future voucher amounts align with expected rent increases.
In summary, while the data raises some concerns, particularly regarding the coverage of mortgage payments by FMR and the need for ongoing monitoring of voucher adjustments, it also highlights opportunities in a market where the average rent is below the FMR. The low renter demand percentage should be considered alongside the total number of households in the area. Careful planning and continuous assessment of the local market conditions are key to making informed investment decisions in ZIP 06331.
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.