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 | $1,350 |
| 1 Bedroom | $1,580 |
| 2 Bedrooms | $1,910 |
| 3 Bedrooms | $2,400 |
| 4 Bedrooms | $2,580 |
| 5 Bedrooms | $2,993 |
| 6 Bedrooms | $3,352 |
| 7 Bedrooms | $3,620 |
| 8 Bedrooms | $3,801 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,580 | $244,706 | 0.65% | D |
| 2BR | $1,910 | $314,867 | 0.61% | D |
| 3BR | $2,400 | $418,169 | 0.57% | F |
| 4BR | $2,580 | $567,837 | 0.45% | F |
| 5BR | $2,993 | $630,909 | 0.47% | F |
U.S. Census Bureau data (2024)
To determine if a landlord should invest in ZIP code 18040 (Easton, PA) for Section 8 properties, follow these steps:
Step 1: Debt Service Coverage Ratio (DSCR)
The Fair Market Rent (FMR) for ZIP 18040 in fiscal year 2024 is $1,600. For a property valued at $453,446, calculate if this FMR can cover the debt service. The DSCR is crucial because it indicates whether the rental income will sufficiently cover the mortgage payments.
If the calculated DSCR shows that $1,600 per month can indeed clear the debt service on a property costing $453,446, then proceed to Step 2. Otherwise, the answer is a clear No.
Step 2: Market Rent Comparison
The average market rent in Easton, PA, according to the Census ACS, is $1,397. Compare this figure to the FMR of $1,600.
If market rent is below the FMR, this suggests a potential upside for Section 8 properties, as they can command higher rents compared to the market. In this case, the answer is Yes.
If market rent is equal to or above the FMR, the advantage of renting to Section 8 tenants diminishes since the rents won't exceed the market rate. This scenario requires further analysis. The answer is It Depends.
Step 3: Demand Analysis
Consider the percentage of renters (8.9%) and the days on market (DOM) for rental listings. Since the DOM is listed as N/A, we must rely on the percentage of renters to gauge demand.
If the percentage of renters is high and there's a significant number of vacant units available, this indicates strong demand for rental properties. Given the 8.9% of renters, if the vacancy rate supports this, the answer is Yes. However, without specific DOM data, it's challenging to quantify how quickly properties are rented out.
If the percentage of renters is low and there's a lack of demand for rental properties, the answer is No. But with 8.9% of renters, this seems unlikely unless other factors such as economic downturns are considered.
In cases where the percentage of renters is moderate and there's no clear indication of high demand, the answer is It Depends. This would require additional research into local economic trends, job growth, and population changes.
Ultimately, the decision to purchase a property in ZIP 18040 for Section 8 investment hinges on the ability of the FMR to cover debt service, the comparison between market rent and FMR, and the level of demand for rental properties. With the given data, if the DSCR is positive and market rent is below FMR, the investment is likely favorable. If market rent equals or exceeds FMR, and demand is uncertain due to the lack of DOM data, further investigation is necessary before making an informed decision.
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.