Location: Potter County, PA | Metro: McKean County, PA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $760 |
| 1 Bedroom | $810 |
| 2 Bedrooms | $1,010 |
| 3 Bedrooms | $1,290 |
| 4 Bedrooms | $1,420 |
| 5 Bedrooms | $1,647 |
| 6 Bedrooms | $1,845 |
| 7 Bedrooms | $1,993 |
| 8 Bedrooms | $2,093 |
U.S. Census Bureau data (2024)
A skeptical investor analyzing ZIP code 16748 might raise several concerns regarding the viability of the area for rental properties under the Section 8 program. Here are three key objections and the data that addresses them.
Objection 1: Will the Fair Market Rent (FMR) of $970 for the metro area in fiscal year 2026 be sufficient to cover the mortgage on a $124,186 home?
The FMR of $970 needs to be evaluated against the typical mortgage costs for a home priced at $124,186. To accurately assess this, we must consider the prevailing interest rates and the term of the mortgage. However, based on historical trends, if the interest rate is around 4%, the monthly mortgage payment for a $124,186 home could be approximately $580, which would leave a significant margin when compared to the FMR. This suggests that the FMR can indeed cover the mortgage payments comfortably, assuming the property is purchased at the median price and financed with a standard mortgage.
Objection 2: Is there enough renter demand at 27.0%?
A 27.0% rental rate indicates that nearly one-quarter of households in ZIP 16748 are renters. While this percentage might seem low to some, it's important to note that the demand for rental housing is also influenced by factors such as population growth, employment opportunities, and the overall cost of living. The data does not provide specific figures on population growth or job creation in the area, so a comprehensive analysis would require additional research into these areas. However, the existing rental rate suggests a stable base of potential tenants.
Objection 3: Will vouchers keep pace with market rents of $745?
The voucher amount is adjusted annually to reflect changes in the housing market. In ZIP 16748, the current market rent is $745, which is below the FMR of $970. This indicates that the voucher should generally cover the market rent, leaving room for slight increases without immediate risk. However, the long-term sustainability depends on how well the voucher amounts track with inflation and local rent increases. The data provided does not include projections for future adjustments to voucher amounts, so investors should monitor these updates closely.
In summary, while the data provides a snapshot of the rental market in ZIP 16748, it highlights the potential for Section 8 properties to be financially viable. The FMR appears to cover mortgage payments effectively, the rental rate suggests a steady demand, and the voucher system currently aligns with market rents. For a complete investment decision, further investigation into local economic conditions and future trends is recommended.
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.