Section 8 Fair Market Rent (FMR) for ZIP 13774 - 2027

FY 2027 Fair Market Rent Rates

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

The analysis for ZIP code 13774 reveals a challenging landscape for landlords and small-portfolio investors when considering the Section 8 program. The Fair Market Rent (FMR) for a 2-bedroom apartment is set at $1,030 per month for fiscal year 2026, based on metro area standards. However, the median home value in the area is not available, which complicates the calculation of a precise cap rate.

To derive a cap rate, we must first establish a gross yield. Given the FMR of $1,030 for a 2-bedroom unit, annualizing this figure yields an annual rental income of $12,360. Without the median home value, it's impossible to calculate a traditional cap rate. Instead, we can consider the gross yield as a ratio of annual rental income to the property's value. If we assume a median home value similar to the national average, the gross yield would be relatively low due to the higher property values typically seen outside of urban centers.

In contrast, the market rent for the area is also not available. This suggests that landlords might face difficulties in setting competitive rents without local benchmarks. Assuming the market rent is higher than the FMR, the gross yield could potentially increase, offering a better return on investment. However, this scenario remains speculative without specific market rent data.

The renter density in ZIP 13774 stands at 18.2%, indicating a smaller proportion of residents who are likely to seek rental housing compared to areas with higher renter populations. This factor might influence the demand for Section 8 properties, making them less attractive to tenants if there are ample homeownership opportunities.

The Days on Market (DOM) is not available, which would normally help gauge how quickly properties are rented out. However, a lower DOM generally implies a faster rental process and thus a more stable cash flow for landlords.

Implied Gross-Yield Comparison:

• Section 8 Scenario: With an annualized rental income of $12,360, the gross yield would be calculated as $12,360 divided by the property's value. For instance, if the median home value were $200,000, the gross yield would be 6.18%. This is below typical market yields and reflects the government-set rental rates.
• Market Rent Scenario: Assuming a market rent higher than the FMR, say $1,200 per month, the annualized rental income would be $14,400. Using the same median home value of $200,000, the gross yield would rise to 7.2%. This is a more favorable gross yield, suggesting that market rents offer better returns than Section 8 rents.

Given the limited data, the market rent scenario appears more realistic for landlords and small-portfolio investors seeking higher returns. The lower renter density and lack of specific market rent data should be considered when deciding whether to participate in the Section 8 program or aim for market rents.

Data Sources: FMR data from HUD (2027). 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.