Location: State College, PA | Metro: State College, PA MSA
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 | $1,190 |
| 1 Bedroom | $1,190 |
| 2 Bedrooms | $1,430 |
| 3 Bedrooms | $1,840 |
| 4 Bedrooms | $1,880 |
| 5 Bedrooms | $2,181 |
| 6 Bedrooms | $2,443 |
| 7 Bedrooms | $2,638 |
| 8 Bedrooms | $2,770 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,840 | $264,192 | 0.7% | D |
| 4BR | $1,880 | $320,714 | 0.59% | F |
U.S. Census Bureau data (2024)
A decision on whether to invest in ZIP code 16820 for Section 8 properties hinges on several key factors:
1) Does the Fair Market Rent (FMR) of $1,160 cover the debt service on a $265,220 property?
Yes. The FMR of $1,160 per month can be sufficient to cover the debt service on a property valued at $265,220. Assuming a standard mortgage rate and term, the monthly payment would likely fall below this threshold, making the property financially viable under Section 8.
No. If the debt service exceeds $1,160 per month, then the property would not be a suitable investment for Section 8. Landlords must ensure that the FMR is high enough to meet their financial obligations.
It Depends. This scenario would apply if the landlord has unique financing terms or if there are additional expenses that could affect the viability of the investment. A thorough analysis of the specific financial situation is necessary.
2) Is the market rent of $1,219 above, at, or below the FMR?
Above. With a market rent of $1,219, which is higher than the FMR of $1,160, landlords could potentially earn more from private tenants. However, they should weigh this against the stability and administrative simplicity of Section 8 tenancy.
At or Below. If the market rent aligns closely with or falls below the FMR, landlords might find it advantageous to participate in the Section 8 program. The gap between market rent and FMR suggests that the program's rates are competitive or even exceed local market conditions.
3) Are 18.6% of residents renters and is the number of days on the market (DOM) sufficient to meet demand?
Yes. Given that 18.6% of residents are renters and assuming a reasonable DOM, there is enough demand to support Section 8 investments. The percentage of renters indicates a steady stream of potential tenants, while a low DOM suggests quick turnover and occupancy.
No. If the DOM is excessively high, indicating difficulty in finding tenants, the investment may not be profitable despite the rental demand. High vacancy rates can significantly impact the financial returns of a property.
It Depends. The exact DOM figure is critical. Without specific DOM data, the decision to invest is contingent upon further research into the local rental market dynamics and vacancy rates.
In summary, ZIP 16820 presents a mixed picture for Section 8 investments. Landlords must carefully consider the financial viability based on the FMR, compare it against market rents, and assess the rental demand before making an informed decision.
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.