Location: Philadelphia-Camden-Wilmington, PA | Metro: Philadelphia-Camden-Wilmington, PA-NJ-DE-MD MSA
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 | $1,230 |
| 1 Bedroom | $1,330 |
| 2 Bedrooms | $1,590 |
| 3 Bedrooms | $1,890 |
| 4 Bedrooms | $2,090 |
| 5 Bedrooms | $2,424 |
| 6 Bedrooms | $2,715 |
| 7 Bedrooms | $2,932 |
| 8 Bedrooms | $3,079 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,590 | $286,358 | 0.56% | F |
| 3BR | $1,890 | $402,871 | 0.47% | F |
| 4BR | $2,090 | $422,472 | 0.49% | F |
U.S. Census Bureau data (2024)
A skeptical investor might question whether the Fair Market Rent (FMR) of $1,590 for ZIP code 19116 in Philadelphia, PA, can sufficiently cover the mortgage on a home valued at $394,382. This concern is valid given that the median home value has increased significantly over recent years. However, the FMR is designed to reflect the rental market's average rate, which should theoretically cover the cost of renting an equivalent property. To determine if it can cover a mortgage, one must consider the interest rates and loan terms. Assuming a typical 30-year fixed-rate mortgage at an average interest rate, the monthly payment for a home priced at $394,382 could range widely depending on the down payment and interest rate. At a current average rate, the FMR might be insufficient without a substantial down payment or additional income sources.
The investor may also doubt the adequacy of renter demand in ZIP 19116, given that only 38.6% of households are renters. While this percentage suggests a significant portion of the population is owner-occupied, it does not necessarily indicate a lack of demand. The rental vacancy rate in the area is relatively low, implying strong competition among renters. Moreover, the demographic makeup of the area often includes young professionals and students who typically rent, thus sustaining demand despite the lower percentage.
Another objection could be whether housing vouchers will keep pace with the market rents, which are currently around $1,810. The Housing Choice Voucher program aims to provide assistance to low-income families, ensuring they pay no more than 30% of their adjusted income towards rent. However, the voucher amount is determined by local housing authorities and is subject to annual adjustments based on the Area Median Income (AMI). In ZIP 19116, while the voucher amounts have historically kept up with inflation, they may not always match the rapid increases in market rents. Investors should monitor local AMI changes and anticipate potential shortfalls between voucher amounts 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.