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 | $1,100 |
| 1 Bedroom | $1,110 |
| 2 Bedrooms | $1,330 |
| 3 Bedrooms | $1,710 |
| 4 Bedrooms | $1,750 |
| 5 Bedrooms | $2,030 |
| 6 Bedrooms | $2,274 |
| 7 Bedrooms | $2,456 |
| 8 Bedrooms | $2,579 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,110 | $177,464 | 0.63% | D |
| 2BR | $1,330 | $237,160 | 0.56% | F |
| 3BR | $1,710 | $312,835 | 0.55% | F |
| 4BR | $1,750 | $423,766 | 0.41% | F |
| 5BR | $2,030 | $430,368 | 0.47% | F |
U.S. Census Bureau data (2024)
The Section 8 thesis for ZIP code 16823, which includes Bellefonte, PA, revolves around the disparity between the Fair Market Rent (FMR) and the actual market rent. For fiscal year 2024, the FMR is set at $1160, while the Zillow Observed Rent Index (ZORI) indicates a market rent of $1267. This creates a gap of $107, or approximately 9.2%, where landlords can either benefit from higher yields or face challenges due to lower rental income.
Given that the FMR is less than the market rent, landlords who accept housing vouchers must be aware of the financial implications. Accepting a voucher tenant means renting your property at the FMR rate, which is $107 below the open-market rate. In a context where 29.5% of residents are renters, and the median income stands at $76,245, landlords might find it difficult to compete with the market rent solely on voucher payments. The median home value in Bellefonte, PA, is $304,106, indicating a relatively stable housing market, but the gap between FMR and market rent highlights a potential challenge for those relying on voucher programs.
To put this into perspective, if a landlord has a property that could command $1267 in the open market, accepting a voucher tenant would mean foregoing $107 per month. Over the course of a year, this amounts to a loss of $1284, assuming the tenant remains for the entire period. However, the stability and security provided by Section 8 tenants, along with government-backed payments, can still make this a viable option for some landlords, especially those looking for long-term, low-risk investments.
Landlords should weigh the benefits of consistent rental income against the opportunity cost of potentially earning more from market-rate tenants. Additionally, the decision to participate in the Section 8 program should consider the local rental market dynamics and the overall economic environment in Bellefonte, PA.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.