Location: New York, NY | Metro: Nassau-Suffolk, 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 | $3,080 |
| 1 Bedroom | $3,240 |
| 2 Bedrooms | $3,530 |
| 3 Bedrooms | $4,470 |
| 4 Bedrooms | $4,900 |
| 5 Bedrooms | $5,684 |
| 6 Bedrooms | $6,366 |
| 7 Bedrooms | $6,875 |
| 8 Bedrooms | $7,219 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $4,470 | $1,055,550 | 0.42% | F |
| 4BR | $4,900 | $1,375,023 | 0.36% | F |
U.S. Census Bureau data (2024)
A skeptical investor might question whether the Fair Market Rent (FMR) of $3,580 for ZIP code 11363 can sufficiently cover the mortgage on a home priced at $1,108,537. This skepticism is valid; however, it's important to consider that the FMR is set annually by HUD and reflects the maximum amount a low- to moderate-income household should pay for housing. Assuming a 30-year fixed-rate mortgage at an average rate of 5%, the monthly payment on a $1,108,537 home would be approximately $5,900. Clearly, the FMR of $3,580 does not cover the mortgage, suggesting that relying solely on Section 8 tenants might not be financially viable without additional income sources.
The investor may also doubt the viability of investing in a ZIP code with only 26.8% of households being renters. This percentage indicates a relatively low rental demand compared to other areas. However, it's crucial to understand that the rental market is just one aspect of investment potential. The remaining 73.2% of homeowners could still provide a stable tenant pool if they are willing to participate in the Section 8 program. Additionally, the overall economic health of the area and the presence of local institutions that attract renters should be considered.
Another concern is whether the Section 8 voucher amounts will keep up with the market rents, which currently stand at $3,117. With the FMR at $3,580, it's evident that the voucher amount is lower than the market rent. This discrepancy means that landlords will need to subsidize the difference between the voucher amount and the actual rent, which could range from $0 to $463 per month depending on the specific unit. It's worth noting that while this subsidy can be significant, it often comes with the benefit of guaranteed occupancy and a government-backed payment system.
To conclude, while the data raises valid concerns about the financial viability of investing in ZIP code 11363 based on the FMR and market rents, it's essential to look beyond these figures. The rental demand, though not high at 26.8%, still presents opportunities for landlords who are willing to manage the risks associated with the subsidy gap. Furthermore, the stability of the Section 8 program can offer advantages in terms of consistent tenancy and reduced vacancy rates.
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.