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 | $1,130 |
| 1 Bedroom | $1,320 |
| 2 Bedrooms | $1,600 |
| 3 Bedrooms | $2,010 |
| 4 Bedrooms | $2,160 |
| 5 Bedrooms | $2,506 |
| 6 Bedrooms | $2,807 |
| 7 Bedrooms | $3,032 |
| 8 Bedrooms | $3,184 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $2,010 | $370,799 | 0.54% | F |
U.S. Census Bureau data (2024)
The analysis of the Section 8 program in ZIP code 18087 reveals a significant gap between the Fair Market Rent (FMR) and the actual market rent. For fiscal year 2024, the FMR is set at $1560, while the Census American Community Survey (ACS) reports an average market rent of $1145. This means that landlords can charge up to $415 more per month for voucher tenants compared to the open-market rate, representing a 36.3% premium.
The higher FMR compared to the market rent makes this area a prime yield play for landlords who accept Section 8 vouchers. With 56.8% of residents being renters, there is a substantial demand for affordable housing. The median home value in the area is $350,870, indicating a relatively stable housing market, but the median income of $72,917 suggests that many residents rely on financial assistance to cover their rent.
Landlords can capitalize on this by renting to voucher holders at the higher FMR rate, thereby increasing their rental income without the risk associated with collecting from low-income tenants directly. However, it's important to note the administrative burden and potential delays in receiving payments that come with participating in the Section 8 program. Despite these challenges, the financial incentive of the 36.3% premium over market rent makes accepting vouchers a lucrative option for those willing to navigate the process.
In summary, the gap between the FMR and the market rent in ZIP 18087 presents a clear opportunity for landlords to enhance their yields by accepting Section 8 vouchers. This strategy aligns well with the local economic conditions, where a majority of the population are renters and median incomes do not sufficiently cover 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.