Section 8 Fair Market Rent (FMR) for ZIP 16801 - 2027

Investment Score for ZIP 16801

Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)

FY 2027 Fair Market Rent Rates

Unit Size	Monthly FMR
Studio	$1,380
1 Bedroom	$1,390
2 Bedrooms	$1,670
3 Bedrooms	$2,150
4 Bedrooms	$2,190
5 Bedrooms	$2,540
6 Bedrooms	$2,845
7 Bedrooms	$3,073
8 Bedrooms	$3,227

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
1BR	$1,390	$214,714	0.65%	D
2BR	$1,670	$301,045	0.55%	F
3BR	$2,150	$394,081	0.55%	F
4BR	$2,190	$517,906	0.42%	F
5BR	$2,540	$620,947	0.41%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 16801 (State College, PA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) figures for ZIP code 16801, State College, PA, are set by HUD for 2026. The FMRs for different unit types are as follows: - 0BR: $1270 - 1BR: $1280 - 2BR: $1510 (which is 29.3% of the median household income) - 3BR: $1890 - 4BR: $2000 These FMRs represent the maximum rent that a Section 8 voucher holder can pay. However, the actual rental market in State College is significantly higher. For instance, the Zillow median price for a 2BR property is $295,878. This implies that the average monthly rent for a 2BR unit is likely much higher than the FMR. To illustrate, if we assume a typical mortgage payment (including principal, interest, taxes, and insurance) of around 1% of the property value per month, the average monthly rent would be approximately $2,466. This is nearly 1.6 times the FMR for a 2BR unit. Given these dynamics, voucher holders face significant constraints. They must find landlords willing to accept lower rents or properties that fall within the FMR range. The disparity between FMR and actual rents suggests that many voucher holders might struggle to secure housing in this area. #### Affordability & Renter Profile ZIP code 16801 has a population of 40,774, with 56.8% of residents being renters. This high percentage indicates a strong demand for rental housing, particularly among those who might rely on assistance programs like Section 8. The median household income in this area is $61,836, which means that a substantial portion of the population may have difficulty affording market-rate rents. The occupancy rate of 87.7% further supports the idea that the rental market is relatively tight. With such a high percentage of units occupied, there is little room for new entrants into the rental market, especially those with limited financial resources. Consequently, the competition for affordable units is fierce, and the supply is likely insufficient to meet the demand. #### Investor Angle From an investor perspective, the ZIP code 16801 presents both opportunities and challenges. The price-to-FMR ratio of 16.3x for a 2BR unit suggests that the cost of acquiring a rental property is very high relative to the rent that can be charged under the Section 8 program. For example, the Zillow median price for a 2BR unit is $295,878, while the FMR is only $1510 per month. This means that an investor would need to generate a significant amount of cash flow from other sources to make the investment viable. However, the high demand for rental housing and the presence of a large number of renters could still make this area attractive for investors. If an investor can find properties below the Zillow median price or negotiate lower rents with landlords, they might achieve positive cash flow. Additionally, the high renter percentage and occupancy rate suggest that there is a stable tenant base, which can provide some security for long-term investments. #### Specific Actionable Insights 1. **Target Lower-Rent Properties**: Investors should focus on acquiring properties that are priced below the Zillow median. For instance, a 2BR unit priced at $250,000 would have a monthly mortgage payment of around $2,083, which is still above the FMR but closer. This could help in securing tenants with Section 8 vouchers more easily. 2. **Negotiate with Landlords**: Given the high demand for rental housing, landlords may be willing to accept lower rents to fill their units. Investors could consider negotiating with landlords to reduce rents to the FMR levels, thereby making the properties more accessible to voucher holders. 3. **Consider Multi-Family Units**: Since the FMR for larger units (like 3BR and 4BR) is also quite low compared to the market rates, investors might want to look into multi-family units where the combined rent for multiple units could exceed the FMR limit. For example, a 3BR unit with an FMR of $1890 could be rented out to multiple families, each paying the FMR, resulting in a total rent of $3780, which is more in line with market expectations. #### Bottom Line For investors focusing specifically on Section 8 vouchers, the ZIP code 16801 presents a challenging environment due to the significant gap between FMR and market rents. While the high demand for rental housing makes it a potentially lucrative market, the constraints imposed by the FMR limits mean that achieving positive cash flow will be difficult without careful selection of properties or negotiation with landlords. **Recommendation**: Skip. The high price-to-FMR ratio and the tight rental market make it less favorable for Section 8-focused investors. However, if investors can find properties significantly below the Zillow median price or are willing to take on the challenge of negotiating lower rents, there might be some opportunities to explore.

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.