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 | $2,320 |
| 1 Bedroom | $2,440 |
| 2 Bedrooms | $2,660 |
| 3 Bedrooms | $3,370 |
| 4 Bedrooms | $3,690 |
| 5 Bedrooms | $4,280 |
| 6 Bedrooms | $4,794 |
| 7 Bedrooms | $5,178 |
| 8 Bedrooms | $5,437 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,660 | $630,880 | 0.42% | F |
| 3BR | $3,370 | $716,913 | 0.47% | F |
| 4BR | $3,690 | $767,315 | 0.48% | F |
U.S. Census Bureau data (2024)
Skeptical investors considering Section 8 properties in ZIP 11411 (New York, NY) often raise several key concerns. Addressing these requires a careful look at the data.
Objection 1: Will the Fair Market Rent (FMR) of $2580 for the fiscal year 2024 cover the mortgage on a $708,082 home?
The FMR of $2580 is the maximum amount that a landlord can receive for a Section 8 rental unit. To determine if this covers the mortgage, we must consider the interest rate and loan terms. Assuming a 30-year fixed-rate mortgage with an average interest rate of around 5%, the monthly payment on a $708,082 home would be approximately $3690. This means the FMR of $2580 falls short by over $1000 per month. However, it's important to note that the property value of $708,082 is likely above average for the area, and many homes in ZIP 11411 will have lower purchase prices, reducing the mortgage burden.
Objection 2: Is there enough renter demand at 15.3%?
The rental vacancy rate of 15.3% might seem high, but it's crucial to understand what this percentage represents. A 15.3% vacancy rate indicates that out of all available rental units, 15.3% are unoccupied. While this does suggest some level of oversupply, it also implies that there is still significant demand for rentals in ZIP 11411. The high vacancy rate could be due to various factors, such as seasonal fluctuations or recent developments in the housing market. For Section 8 tenants specifically, the demand tends to be steady due to the guaranteed income from the government.
Objection 3: Will vouchers keep pace with $1,723 market rents?
The average market rent of $1,723 is higher than the FMR of $2580, indicating that vouchers may not cover the entire rent. However, the Housing Choice Voucher program aims to ensure that rent does not exceed 30% of a tenant's income, which means landlords are compensated based on the difference between the voucher amount and the actual rent. If the voucher amount is $2580, and the market rent is $1,723, the voucher would cover the full rent, leaving the landlord with the full amount. The challenge arises when market rents exceed the voucher amount, as seen here. In such cases, landlords might need to adjust their expectations or seek other sources of income to make up the difference.
The data provides a snapshot of the situation but doesn't account for all variables. For instance, property taxes, insurance, maintenance costs, and potential increases in voucher amounts or market rents are not included in the analysis. These factors should also be considered before making any investment decisions.
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.