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 |
|---|---|---|---|---|
| 2BR | $1,270 | $275,923 | 0.46% | F |
| 3BR | $1,590 | $347,758 | 0.46% | F |
| 4BR | $1,680 | $491,298 | 0.34% | F |
U.S. Census Bureau data (2024)
A skeptical investor might question whether the Fair Market Rent (FMR) of $1,160 for ZIP 16875 (Spring Mills, PA) in fiscal year 2024 will sufficiently cover the mortgage on a home valued at $351,489. To address this, let's consider the average mortgage rates. As of September 3, 2024, typical mortgage rates range between 4.5% and 5.5%. For a $351,489 home with a 20% down payment, the monthly mortgage payment would likely fall between $1,500 and $1,700, depending on the exact rate and term length. While the FMR of $1,160 does not fully cover the mortgage, it suggests that landlords must either secure additional financing or accept some of the mortgage cost as part of their investment strategy.
The 16.9% renter demand figure might also raise concerns. However, the average 2-bedroom rental price in Spring Mills is $1,130, which is lower than the national average of $1,430. This indicates that while the renter demand percentage is relatively modest, the affordability of the area could attract renters. Additionally, the unemployment rate in Spring Mills is 4.9%, which is slightly above the national average but still manageable. It's worth noting that the data does not provide a detailed breakdown of the renter demand by income bracket or employment type, so further analysis might be needed to fully understand the potential tenant pool.
The final objection is whether housing vouchers will keep pace with market rents of $945. According to HUD's Small Area Fair Market Rents (SAFMRs), the FMR for ZIP 16875 is $1,160, indicating that voucher amounts should be adjusted accordingly. However, the specific utilization rate for vouchers in Spring Mills is not available in the data. To gain a clearer picture, landlords would need to consult local housing authorities for more detailed information on voucher distribution and average payment amounts.
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.