Section 8 Fair Market Rent (FMR) for ZIP 17602 - 2027

Investment Score for ZIP 17602

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	$1,250
1 Bedroom	$1,360
2 Bedrooms	$1,680
3 Bedrooms	$2,140
4 Bedrooms	$2,210
5 Bedrooms	$2,564
6 Bedrooms	$2,872
7 Bedrooms	$3,102
8 Bedrooms	$3,257

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	$1,360	$211,329	0.64%	D
2BR	$1,680	$265,238	0.63%	D
3BR	$2,140	$310,343	0.69%	D
4BR	$2,210	$417,400	0.53%	F
5BR	$2,564	$357,933	0.72%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 17602 (Lancaster, PA) #### Section 8 Voucher Dynamics In ZIP code 17602, the Fair Market Rent (FMR) for a two-bedroom unit is set at $1,610 per month for 2026. This amount represents 25.5% of the median household income in the area, which is $75,862. The FMRs for other unit sizes are as follows: $1,160 for a zero-bedroom unit, $1,290 for a one-bedroom unit, $2,090 for a three-bedroom unit, and $2,130 for a four-bedroom unit. These figures are crucial for understanding how much rent Section 8 voucher holders can afford. However, the actual rental market in Lancaster, PA, is significantly higher than the FMR. For instance, the Zillow median price for a two-bedroom home is $262,521, which translates into a monthly mortgage payment that would be far above the FMR. The price-to-FMR ratio for a two-bedroom unit is 13.6x, indicating that the actual market rents are substantially higher than what is covered by the vouchers. This means that voucher holders face significant constraints in finding affordable housing within the ZIP code, as landlords may be reluctant to accept vouchers due to the lower rent compared to market rates. #### Affordability & Renter Profile ZIP code 17602 has a population of 52,217, with 41.7% of residents being renters. This high percentage suggests that there is a substantial demand for rental properties in the area. The occupancy rate stands at 96.5%, indicating that the rental market is quite tight, with very few vacant units available. Given the high demand and low vacancy rate, it is likely that the competition for rental units is intense, particularly among those who rely on Section 8 vouchers. The median household income of $75,862 suggests that the majority of residents have relatively stable financial situations, but the 41.7% renter rate indicates that many individuals still find it challenging to purchase homes. This makes the rental market a critical component of the local economy, especially for those who cannot afford to buy property outright. #### Investor Angle From an investor's perspective, the ZIP code 17602 presents a mixed picture when considering cash flow and investment grade. The FMRs are significantly lower than the actual market rents, which means that landlords who accept Section 8 vouchers will likely see reduced cash flow compared to those who do not. For example, the FMR for a two-bedroom unit is $1,610, while the Zillow median price implies a much higher market rent. If we assume a typical mortgage payment based on the Zillow median price, it would be around $1,200 per month (using a 4.5% interest rate and a 30-year term). Adding property taxes, insurance, and maintenance costs, the total monthly expenses could easily exceed the FMR. Therefore, accepting Section 8 vouchers might not be financially viable for landlords seeking to maximize their returns. Despite these challenges, the high occupancy rate and strong demand for rental properties suggest that the overall market is robust. However, the investment grade would depend on the landlord’s willingness to accept lower rents and the potential for long-term stability provided by government-backed vouchers. #### Specific Actionable Insights 1. **Focus on Multi-Family Properties**: Given the high renter percentage and tight market conditions, investing in multi-family properties could provide better cash flow. Landlords can diversify their risk by having multiple units under management, some of which can be rented at market rates and others at FMRs. 2. **Consider Location-Specific Strategies**: While the overall market may be tight, certain neighborhoods within ZIP 17602 might offer more opportunities for affordable rentals. Conducting a neighborhood-by-neighborhood analysis could reveal areas where the gap between FMR and market rents is smaller, making Section 8 properties more attractive. 3. **Explore Government Programs**: Investors should look into additional government programs that can supplement the income from Section 8 properties. For instance, the Low-Income Housing Tax Credit (LIHTC) program can provide significant tax benefits for developers who build or rehabilitate affordable housing. #### Bottom Line Given the high price-to-FMR ratio and the tight rental market, the recommendation for Section 8-focused investors in ZIP code 17602 is to **Skip**. The financial constraints imposed by the FMRs make it difficult to achieve positive cash flow without significant subsidies or strategic investments in specific neighborhoods. Investors looking for immediate positive cash flow should consider other ZIP codes with a more favorable balance between FMRs and market rents. However, if an investor is willing to accept lower initial returns in exchange for long-term stability and potential tax benefits, they might find some value in exploring targeted opportunities within the ZIP code.

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.