Section 8 Fair Market Rent (FMR) for ZIP 17601 - 2027

Investment Score for ZIP 17601

Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)

FY 2027 Fair Market Rent Rates

Unit Size	Monthly FMR
Studio	$1,310
1 Bedroom	$1,430
2 Bedrooms	$1,770
3 Bedrooms	$2,250
4 Bedrooms	$2,330
5 Bedrooms	$2,703
6 Bedrooms	$3,027
7 Bedrooms	$3,269
8 Bedrooms	$3,432

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
1BR	$1,430	$208,366	0.69%	D
2BR	$1,770	$312,113	0.57%	F
3BR	$2,250	$385,485	0.58%	F
4BR	$2,330	$564,443	0.41%	F
5BR	$2,703	$716,531	0.38%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 17601 (Lancaster, PA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 17601 is set by HUD for 2026, with the following rates: - 0BR: $1260 - 1BR: $1390 - 2BR: $1740 (which represents 20.4% of the median household income) - 3BR: $2260 - 4BR: $2300 These FMRs represent the maximum rent that a Section 8 voucher holder can pay for housing. However, the actual rental market in ZIP 17601 is significantly higher than these FMRs. For instance, the Zillow median price for a 2-bedroom home is $304,717, which translates into a monthly mortgage payment of approximately $1,460 based on the price-to-FMR ratio of 14.6x. This suggests that the actual rental prices are likely to be much higher than the FMRs, making it challenging for voucher holders to find affordable housing options within their budget. #### Affordability & Renter Profile ZIP code 17601 has a population of 56,382, with 27.5% of residents being renters. The occupancy rate is 98.0%, indicating a very tight rental market where most available units are occupied. Given the median household income of $102,435, the 2BR FMR of $1740 represents only 20.4% of the median income, suggesting that the majority of residents can afford to pay more than the FMR for housing. However, this also implies that those relying solely on Section 8 vouchers will struggle to find suitable housing, as the FMR is far below the market rent. The high occupancy rate and the relatively low percentage of renters indicate that there is a strong demand for rental properties, but the supply is limited. This makes it difficult for voucher holders to secure housing, especially since landlords may prefer tenants who can pay higher rents. #### Investor Angle From an investor perspective, the ZIP code 17601 presents both opportunities and challenges. The Zillow median price for a 2BR home is $304,717, which is 14.6 times the 2BR FMR of $1740. This means that the average market rent for a 2BR property is around $25,344 per year ($2,112 per month), while the FMR allows for a maximum annual rent of $20,880 ($1,740 per month). Given the high occupancy rate and the strong demand for rental properties, investors might consider the potential for higher market rents. However, the challenge lies in the fact that Section 8 voucher holders can only pay up to the FMR, which is significantly lower than the market rent. Therefore, investors focusing on Section 8 voucher holders would need to ensure that their rental properties are priced at or below the FMR to attract these tenants. The investment grade for this ZIP code would be considered moderate to high risk due to the tight rental market and the difficulty in finding properties that meet the FMR requirements. Investors should carefully evaluate the potential for long-term occupancy and the likelihood of securing Section 8 voucher holders as tenants. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Since the FMR for smaller units (0BR and 1BR) is lower, investors might want to focus on developing or acquiring smaller units. For example, a 0BR unit with a FMR of $1260 could potentially be rented out at a slightly higher rate if the property is well-maintained and located in a desirable area. This would allow investors to capture some premium over the FMR while still remaining attractive to voucher holders. 2. **Consider Renovation Projects**: Given the high occupancy rate, there is a significant opportunity to renovate older properties and bring them up to a standard that would appeal to voucher holders. By investing in renovations, investors can improve the quality of the units and potentially increase the number of voucher holders willing to rent them. For instance, a 2BR unit that is renovated and priced at $1740 per month could be more competitive in the rental market compared to a similar unit in poor condition. 3. **Explore Multi-Family Properties**: Multi-family properties offer a mix of unit sizes, which can cater to different needs and budgets. An investor could acquire a multi-family building and rent out smaller units at or near the FMR, while larger units could be rented at market rates. This strategy would help balance the financial risks associated with renting to voucher holders and provide a more stable cash flow. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 17601 is to **Skip**. The tight rental market and the significant gap between FMR and actual market rents make it challenging to find properties that are both affordable and profitable. While there are opportunities in smaller units and renovation projects, the overall risk is high, and the potential for long-term occupancy is uncertain. Investors looking for more stable returns might want to consider other ZIP codes with a higher proportion of renters and a more favorable balance between FMR and market rents.

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.