Section 8 Fair Market Rent (FMR) for ZIP 10155 - 2027

FY 2027 Fair Market Rent Rates

The analysis for ZIP code 10155 reveals a complex picture when it comes to the Section 8 cap rate, primarily due to the lack of specific data points such as median home value and market rent. However, we can still derive some insights using the available Fair Market Rent (FMR) data.

The annualized 2BR FMR for ZIP 10155 in FY 2024 is set at $3450. This figure represents the maximum amount that a landlord can charge for a two-bedroom apartment under the Section 8 program. To calculate the implied gross yield, we need to know the median home value, which is currently unavailable. However, we can still provide a general framework for understanding the potential returns.

In a scenario where the median home value is known, say $X, the implied gross yield would be calculated as follows: divide the annualized FMR ($3450) by the median home value ($X), then multiply by 100 to get the percentage. For example, if the median home value were $400,000, the implied gross yield would be 0.86% ($3450 / $400,000 * 100).

Without the market rent figure, it's challenging to compare the gross yield between the Section 8 program and the private rental market. Typically, market rents can offer higher yields, but the exact difference cannot be quantified without specific data. Landlords should consider the trade-offs between higher market rents and the stability provided by Section 8 tenants, who have their rent subsidized by the government.

The renter density and days on market (DOM) are also critical factors. With an unknown renter density and DOM, landlords must rely on local real estate trends and consult with local brokers to understand the demand for rental properties. If the area has a high renter density and low DOM, it suggests strong demand for rentals, which could support higher market rents and potentially higher gross yields compared to Section 8.

In conclusion, while the precise cap rate and gross yield for ZIP 10155 under the Section 8 program cannot be determined without the median home value and market rent, the annualized FMR provides a baseline for expected income. Landlords should weigh the benefits of guaranteed rental payments from Section 8 against the potential for higher yields in the private market, considering local demand and property values.

Data Sources: FMR data from HUD (2027).

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.