Section 8 Fair Market Rent (FMR) for ZIP 06457 - 2027

Investment Score for ZIP 06457

Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)

FY 2027 Fair Market Rent Rates

Unit Size	Monthly FMR
Studio	$1,380
1 Bedroom	$1,580
2 Bedrooms	$1,980
3 Bedrooms	$2,360
4 Bedrooms	$2,600
5 Bedrooms	$3,016
6 Bedrooms	$3,378
7 Bedrooms	$3,648
8 Bedrooms	$3,830

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
1BR	$1,580	$165,873	0.95%	C
2BR	$1,980	$277,075	0.71%	D
3BR	$2,360	$393,312	0.6%	D
4BR	$2,600	$484,247	0.54%	F
5BR	$3,016	$487,696	0.62%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 06457 (Middletown, CT) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for Middletown, CT, as of 2026, is set at $1930 for a two-bedroom unit. This amount represents 29.1% of the median household income in the area, which stands at $79,463. However, the actual rental market prices are significantly higher. According to Zillow, the median price for a two-bedroom rental property in Middletown is $265,066, which translates to a price-to-FMR ratio of 11.4x. This means that the actual rent for a two-bedroom unit is approximately $21,810 annually, while the FMR would only cover about $19,300 annually. Therefore, voucher holders face substantial constraints, as they can only afford units up to the FMR, which is far below the market rate. #### Affordability & Renter Profile In Middletown, 47.1% of the population are renters, indicating a significant demand for rental properties. The occupancy rate of 94.3% suggests that the market is relatively tight, with few vacant units available. Given that the median household income is $79,463, the FMR of $1930 for a two-bedroom unit is quite affordable for many residents. However, the actual market prices are much higher, making it difficult for lower-income individuals to find suitable housing without assistance. This tight market condition implies that there is a strong need for affordable housing options, particularly those that align with FMR guidelines. #### Investor Angle From an investor perspective, the ZIP code 06457 offers a challenging but potentially rewarding opportunity. At the FMR of $1930 for a two-bedroom unit, the cash flow would be negative if investors were to purchase properties at the median market price of $265,066. To break even, investors would need to achieve a rental yield of around 8.7%, which is unlikely given the current market conditions. Additionally, the high price-to-FMR ratio indicates that the market is overvalued relative to the FMR, suggesting that the investment grade is low. Investors should carefully consider the financial implications before entering this market, especially if they are focusing on Section 8 vouchers. #### Specific Actionable Insights 1. **Focus on Lower-Rent Units**: Since the FMR is significantly lower than the market rates, investors should focus on acquiring units that are priced closer to the FMR. For instance, a one-bedroom unit with an FMR of $1530 might be more financially viable. This strategy would help in maximizing cash flow and ensuring that the units are affordable for voucher holders. 2. **Consider Multi-Family Properties**: Multi-family properties often have economies of scale that can improve overall profitability. An investor might look into purchasing a multi-unit building where some units could be rented at FMR rates and others at market rates. This mixed approach could balance out the financial risks associated with relying solely on FMR rents. 3. **Engage with Local Housing Authorities**: Building relationships with local housing authorities can provide valuable insights into the availability and distribution of Section 8 vouchers. This knowledge can help investors target areas and units that are most likely to attract voucher holders, thereby increasing the chances of securing tenants and maintaining occupancy. #### Bottom Line Given the high price-to-FMR ratio and the tight market conditions, the recommendation for Section 8-focused investors is to **skip** this ZIP code unless they can acquire properties at a significant discount to the median market price. The current market dynamics make it challenging to achieve positive cash flow at FMR rates, and the limited supply of affordable units suggests that the competition for these properties is fierce. Investors looking to enter the Middletown rental market should explore other ZIP codes with better alignment between market rents and FMRs, or consider alternative investment strategies that do not rely heavily on Section 8 vouchers.

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.