Location: New York, NY | Metro: New York, NY HUD Metro FMR Area
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 | $3,890 |
| 1 Bedroom | $4,100 |
| 2 Bedrooms | $4,460 |
| 3 Bedrooms | $5,640 |
| 4 Bedrooms | $6,190 |
| 5 Bedrooms | $7,180 |
| 6 Bedrooms | $8,042 |
| 7 Bedrooms | $8,685 |
| 8 Bedrooms | $9,119 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $4,460 | $778,596 | 0.57% | F |
| 3BR | $5,640 | $992,141 | 0.57% | F |
| 4BR | $6,190 | $1,297,467 | 0.48% | F |
| 5BR | $7,180 | $1,760,557 | 0.41% | F |
U.S. Census Bureau data (2024)
The Section 8 thesis in ZIP code 10536, which encompasses parts of Katonah, NY, is fundamentally about leveraging the disparity between the Fair Market Rent (FMR) and the actual market rent. For fiscal year 2024, the FMR in ZIP 10536 is set at $3500, whereas the Census American Community Survey (ACS) reports the market rent at $2483. This creates a significant gap of $1017 per month, or approximately 40.9%, where landlords can secure higher rental income through Section 8 vouchers.
In Katonah, NY, only 10.1% of residents are renters, indicating a predominantly owner-occupied market. However, this does not diminish the potential for landlords to benefit from the Section 8 program. The high median home value of $1,075,535 suggests that homeownership is costly, making rental properties, especially those supported by Section 8 vouchers, attractive to lower-income families. Given the median household income of $250,001, it's evident that many families may struggle to afford market-rate rents without assistance.
The gap between the FMR and the market rent makes this area a prime opportunity for a yield play. Landlords can charge rents closer to the FMR rate, which is significantly higher than what the market would bear. This means that landlords can potentially receive higher monthly payments than they would from typical market-rate tenants. Moreover, the stability of rental income from Section 8 vouchers reduces the risk of vacancy and delinquency, providing a reliable cash flow.
However, it's crucial to understand the implications of accepting Section 8 tenants. While the FMR is higher than the market rent, the cost of maintaining compliance with HUD regulations can be substantial. Additionally, the process of obtaining and managing a Section 8 voucher involves administrative burdens that may offset some of the financial gains. Despite these challenges, the potential for higher yields, combined with the security of government-backed payments, makes ZIP 10536 an interesting market for landlords willing to navigate the complexities of the Section 8 program.
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.