Location: Allentown-Bethlehem-Easton, PA | Metro: Allentown-Bethlehem-Easton, PA HUD Metro FMR Area
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 | $1,100 |
| 1 Bedroom | $1,290 |
| 2 Bedrooms | $1,560 |
| 3 Bedrooms | $1,960 |
| 4 Bedrooms | $2,110 |
| 5 Bedrooms | $2,448 |
| 6 Bedrooms | $2,742 |
| 7 Bedrooms | $2,961 |
| 8 Bedrooms | $3,109 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,560 | $250,875 | 0.62% | D |
| 3BR | $1,960 | $315,965 | 0.62% | D |
| 4BR | $2,110 | $454,641 | 0.46% | F |
| 5BR | $2,448 | $451,910 | 0.54% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 18013 in Bangor, PA, reveals some key insights into the potential returns for landlords and small-portfolio investors. The Fair Market Rent (FMR) for a two-bedroom property in fiscal year 2024 is set at $1320 annually, while the market rent, represented by the Zillow Observed Rent Index (ZORI), stands at $1,297 per month.
To calculate the gross yield, we annualize the rents and compare them to the median home value of $310,770. For the FMR scenario, the annualized rent is $15,840 ($1320 x 12 months), leading to an implied gross yield of approximately 5.1%. This is calculated as follows: $15,840 / $310,770 = 0.051, or 5.1%. In contrast, using the market rent figure of $1,297 per month, the annualized rent is $15,564, resulting in a slightly lower gross yield of around 5.0%: $15,564 / $310,770 = 0.050, or 5.0%.
Given the 22.1% renter density in the area, it is reasonable to conclude that the market rent scenario is more reflective of the reality faced by landlords. A higher proportion of renters suggests a competitive rental market where properties may struggle to command the higher FMR rates. The fact that the days on market (DOM) is listed as N/A also indicates that there might be insufficient data to gauge how quickly properties are typically rented out, which could affect the reliability of the FMR as a predictor of actual rental income.
In summary, while the FMR provides a benchmark, the market rent offers a more accurate depiction of potential earnings. Investors should consider the gross yield of about 5.0% when evaluating the viability of Section 8 properties in ZIP 18013. This analysis helps frame expectations without delving into net operating income (NOI) specifics, allowing investors to tailor their financial projections based on their unique costs and circumstances.
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.