Location: Dover, DE | Metro: Dover, DE 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 | $1,330 |
| 1 Bedroom | $1,340 |
| 2 Bedrooms | $1,690 |
| 3 Bedrooms | $2,330 |
| 4 Bedrooms | $2,690 |
| 5 Bedrooms | $3,120 |
| 6 Bedrooms | $3,494 |
| 7 Bedrooms | $3,774 |
| 8 Bedrooms | $3,963 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,690 | $247,712 | 0.68% | D |
| 3BR | $2,330 | $312,396 | 0.75% | D |
| 4BR | $2,690 | $401,577 | 0.67% | D |
| 5BR | $3,120 | $485,374 | 0.64% | D |
U.S. Census Bureau data (2024)
A skeptical investor might question whether the Fair Market Rent (FMR) of $1,390 for ZIP 19901 (Dover, DE) in fiscal year 2024 will sufficiently cover the mortgage on a home valued at $330,634. To address this concern, let's consider the typical mortgage payments. According to recent housing data, the median home value in ZIP 19901 is around $258,400. Assuming a 20% down payment and a 30-year fixed-rate mortgage at an interest rate of 5%, the monthly mortgage payment for a $330,634 home would be approximately $1,470. This is slightly higher than the FMR, indicating that landlords would need to supplement the rent with additional income sources to fully cover mortgage costs.
Another objection could be whether there is sufficient renter demand at 44.5%. The data suggests that in the Dover Base Housing neighborhood, 100% of the real estate is occupied by renters, which is nearly the highest rate of renter occupancy. However, this does not directly translate to the entire ZIP 19901 having a 100% rental rate. Given the 44.5% figure, it is clear that a significant portion of the housing stock is rented, but this leaves a substantial portion owner-occupied. For small-portfolio investors, this means there is demand for rental properties, but they should be cautious about overestimating the total rental market size.
The final objection relates to whether Section 8 vouchers will keep pace with market rents of $1,630. The Housing Choice Voucher program's payment standard is set at the FMR level, which in ZIP 19901 for 2024 is $1,390. This is significantly lower than the market rent of $1,630. Landlords who rely solely on vouchers may face a shortfall unless they can negotiate higher rents from tenants who supplement the voucher with personal funds. The data indicates that voucher usage in Dover is robust, but it also implies that landlords should expect to subsidize the difference between the voucher payment and the actual market rent.
In summary, while there is a strong rental market in ZIP 19901, the FMR and voucher payments do not fully cover the mortgage on higher-valued homes, nor do they match the current market rents. Investors should plan accordingly and consider diversifying their investment strategies to mitigate these risks.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). 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.