Location: Norwich-New London-Willimantic, CT | Metro: Norwich-New London-Willimantic, 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 | $1,570 |
| 1 Bedroom | $1,800 |
| 2 Bedrooms | $2,250 |
| 3 Bedrooms | $2,860 |
| 4 Bedrooms | $3,540 |
| 5 Bedrooms | $4,106 |
| 6 Bedrooms | $4,599 |
| 7 Bedrooms | $4,967 |
| 8 Bedrooms | $5,215 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,800 | $246,232 | 0.73% | D |
| 2BR | $2,250 | $348,560 | 0.65% | D |
| 3BR | $2,860 | $449,700 | 0.64% | D |
| 4BR | $3,540 | $560,571 | 0.63% | D |
| 5BR | $4,106 | $651,111 | 0.63% | D |
U.S. Census Bureau data (2024)
To determine if you should buy in ZIP 06385 (Waterford, CT) for Section 8, follow this decision tree:
1) Does FMR $1,820 (zip FY 2024) clear debt service on a $426,899 property?
No: The Fair Market Rent (FMR) of $1,820 is insufficient to cover the debt service on a property valued at $426,899. A typical mortgage payment for such a property would be higher than the FMR, making it unprofitable without additional subsidies.
Yes: This scenario is unlikely given the typical interest rates and loan terms. However, if you manage to secure a low-interest rate or have a significant down payment reducing your monthly debt service below $1,820, then proceed to the next question.
It Depends: If you are considering a property significantly below the average value of $426,899, or if you can negotiate a lower purchase price, then the FMR might cover your debt service. In this case, continue to the next question.
2) Is market rent $2,000 (ZORI) above, at, or below FMR?
Above: With a ZORI of $2,000, market rents exceed the FMR. This indicates that Section 8 tenants will pay less than what the market demands. Landlords may prefer to lease to market-rate tenants instead.
At: If market rents are exactly at the FMR level, then leasing to Section 8 tenants is financially equivalent to leasing to market-rate tenants. You can move to the third question.
Below: This situation is unlikely since the ZORI is set at $2,000. However, if market conditions change and market rents fall below the FMR, then Section 8 could provide a stable income source.
3) Are 21.4% renters + N/A-day DOM enough demand?
No: The rental rate of 21.4% is relatively low, indicating a smaller pool of potential tenants. Additionally, the lack of data on Days on Market (DOM) suggests either a stable housing market where vacancies are rare, or an unstable one where data is incomplete. Either way, demand is likely insufficient for a Section 8 investment to thrive.
Yes: If the rental rate of 21.4% represents a sufficient number of units to meet your investment goals, and the market remains stable, then Section 8 could be viable. However, the absence of DOM data introduces uncertainty into the analysis.
It Depends: The viability of a Section 8 investment in Waterford, CT, hinges on the stability and size of the rental market. A 21.4% rental rate may support some Section 8 investments, but the lack of DOM data means you must rely on other indicators of market health and tenant demand.
In conclusion, the primary gating factor is whether the FMR can cover your debt service. Given the typical costs associated with a $426,899 property, it is unlikely that the FMR of $1,820 would suffice. Even if market conditions allow for market rents above the FMR, the relatively low rental rate and incomplete DOM data suggest that demand may not be robust enough to support a Section 8 investment in Waterford, CT.
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.