Location: Lancaster, PA | Metro: Lancaster, 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 | $1,040 |
| 1 Bedroom | $1,130 |
| 2 Bedrooms | $1,400 |
| 3 Bedrooms | $1,790 |
| 4 Bedrooms | $1,840 |
| 5 Bedrooms | $2,134 |
| 6 Bedrooms | $2,390 |
| 7 Bedrooms | $2,581 |
| 8 Bedrooms | $2,710 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,400 | $308,175 | 0.45% | F |
| 3BR | $1,790 | $371,593 | 0.48% | F |
| 4BR | $1,840 | $482,611 | 0.38% | F |
| 5BR | $2,134 | $594,031 | 0.36% | F |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 17517 in Denver, PA, reveals interesting insights into potential investment returns. To calculate the cap rate, we need to determine the gross yield based on the Federal Market Rent (FMR) and the market rent.
Starting with the annualized 2BR FMR of $1160 for fiscal year 2024, the total annual rental income would be $13,920 ($1160 x 12 months). Given the median home value of $386,350, the implied gross yield for the Section 8 scenario is approximately 3.6% ($13,920 / $386,350).
Moving to the market rent of $1,224 as reported by the Census ACS, the annual rental income would be $14,688 ($1,224 x 12 months). Using the same median home value of $386,350, the implied gross yield for the market rent scenario is about 3.8% ($14,688 / $386,350).
The difference between these two yields is minimal, with the market rent scenario offering a slightly higher gross yield compared to the Section 8 scenario. However, the decision between the two should also consider the local rental market conditions. With a renter density of 14.5%, it suggests that the majority of homeowners in Denver, PA, are likely owner-occupiers rather than renters. This could imply that finding tenants who qualify for Section 8 might be challenging, making the market rent scenario more realistic.
Additionally, the N/A-day DOM (Days on Market) indicates that there is insufficient data to assess how quickly properties are rented out. This lack of information makes it difficult to predict vacancy rates accurately. However, considering the slightly higher gross yield and the relatively low renter density, it's reasonable to conclude that the market rent scenario presents a more practical investment opportunity for landlords and small-portfolio investors in ZIP 17517.
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.