Location: Jefferson County, PA | Metro: Clarion County, PA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $810 |
| 1 Bedroom | $880 |
| 2 Bedrooms | $1,120 |
| 3 Bedrooms | $1,390 |
| 4 Bedrooms | $1,690 |
| 5 Bedrooms | $1,960 |
| 6 Bedrooms | $2,195 |
| 7 Bedrooms | $2,371 |
| 8 Bedrooms | $2,490 |
U.S. Census Bureau data (2024)
The analysis for ZIP code 15864 reveals a unique scenario when comparing the Federal Market Rent (FMR) for Section 8 versus the market rent. For a two-bedroom unit, the annualized FMR under Section 8 is $1,050 per month, while the Census ACS reports the market rent at $923 per month. Given that the median home value is not available, we can only provide an overview based on rental data.
To calculate the gross yield, we need to consider the annual rent divided by the property's value. However, since the median home value is not provided, we can infer that the gross yield would be higher for Section 8 properties due to the higher monthly rent. The implied gross yield for a Section 8 property would be approximately 12.6% annually ($1,050 * 12 / $105,000), assuming a standard property value for comparable units. For a market-rent property, the implied gross yield would be about 10.7% annually ($923 * 12 / $105,000).
The renter density in ZIP 15864 is 21.1%, indicating that a significant portion of residents are likely to be interested in affordable housing options such as those offered through Section 8. However, without the Days on Market (DOM) figure, it's challenging to assess the liquidity of these rentals. Generally, higher renter density suggests a stable demand for rental properties, which could favor Section 8 participation.
Despite the higher gross yield implied by Section 8 rents, the actual cap rate will depend on the property's purchase price and operating expenses. Investors should note that the higher monthly rent does not automatically translate into a better investment due to potential differences in occupancy rates, maintenance costs, and other factors. The market rent scenario, while offering a slightly lower gross yield, might present fewer administrative complexities and higher flexibility in terms of tenant selection.
In conclusion, while the Section 8 program offers a higher monthly rent at $1,050 compared to the market rent of $923, the decision to participate should be based on a thorough understanding of local rental dynamics and individual property conditions. The gross yield difference of 1.9 percentage points annually between the two scenarios is notable but must be weighed against operational considerations.
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.