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 | $1,070 |
| 1 Bedroom | $1,080 |
| 2 Bedrooms | $1,270 |
| 3 Bedrooms | $1,590 |
| 4 Bedrooms | $1,680 |
| 5 Bedrooms | $1,949 |
| 6 Bedrooms | $2,183 |
| 7 Bedrooms | $2,358 |
| 8 Bedrooms | $2,476 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,590 | $248,024 | 0.64% | D |
U.S. Census Bureau data (2024)
The ZIP code 16854 is situated in a predominantly homeowner-driven neighborhood with a total population of 883 residents. Only 11.8% of these residents are renters, indicating a community where ownership is highly valued. The median household income in this area stands at $78,625, which is relatively high, suggesting a prosperous demographic. The median home value in ZIP 16854 is $231,912, reflecting a stable housing market.
Moving into the realm of rental economics, the Fair Market Rent (FMR) for ZIP 16854, as set for fiscal year 2024, is $1,160. This figure is notably higher than the average market rent reported by the Census Bureau's American Community Survey, which is $925. This disparity highlights an opportunity for landlords and small-portfolio investors who can position themselves between the market rate and the government-set FMR to attract tenants eligible for Section 8 vouchers.
The question then arises: is this ZIP code suitable for a hands-off voucher operator or a hands-on value-add buyer? Given the low percentage of renters and the significant gap between the FMR and the market rent, it is more fitting for a hands-on approach. A value-add buyer could leverage the discrepancy to renovate properties and charge closer to the FMR, thereby maximizing returns while still attracting subsidized tenants. Conversely, a hands-off operator might struggle with the lower demand for rentals and the need for constant tenant turnover due to the limited number of Section 8 voucher holders in the area.
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.