Section 8 Fair Market Rent (FMR) for ZIP 20120 - 2027

Investment Score for ZIP 20120

Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)

FY 2027 Fair Market Rent Rates

Unit Size	Monthly FMR
Studio	$2,350
1 Bedroom	$2,450
2 Bedrooms	$2,710
3 Bedrooms	$3,450
4 Bedrooms	$4,070
5 Bedrooms	$4,721
6 Bedrooms	$5,288
7 Bedrooms	$5,711
8 Bedrooms	$5,997

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
1BR	$2,450	$309,207	0.79%	D
2BR	$2,710	$417,409	0.65%	D
3BR	$3,450	$584,303	0.59%	F
4BR	$4,070	$858,411	0.47%	F
5BR	$4,721	$1,084,869	0.44%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 20120 (Centreville, VA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 20120 in Centreville, VA, is set by HUD for 2026. The FMRs are as follows: - 0BR: $2120 - 1BR: $2190 - 2BR: $2440 - 3BR: $3080 - 4BR: $3620 These figures represent the maximum amount that a Section 8 voucher holder can pay for rent. However, comparing these FMRs to actual rental rates in the area reveals significant constraints. For instance, the FMR for a 2BR unit is $2440, which is only 19.2% of the median household income of $152,563. This indicates that while the FMR is relatively low compared to the median income, it may still be challenging for voucher holders to find affordable housing given the high cost of living in the area. #### Affordability & Renter Profile The population of Centreville is 42,896, with 24.6% of residents being renters. This suggests that there is a substantial rental market, but it is also indicative of a tight market due to the high occupancy rate of 98.5%. The median household income of $152,563 implies that the majority of residents are well-off, which likely contributes to the high demand for rental units. Given the high median household income, the typical renter in this area is likely to be someone who is financially stable but may still benefit from rental assistance programs like Section 8. However, the price-to-FMR ratio of 14.3x for a 2BR unit, based on Zillow's median price of $419,515, indicates that the rental market is far from affordable for those relying solely on Section 8 vouchers. The actual rental costs are likely to be much higher than the FMRs, making it difficult for voucher holders to find suitable housing. #### Investor Angle From an investor's perspective, the ZIP code 20120 presents a mixed picture. While the FMRs provide a benchmark for rental pricing, the reality is that rental rates are significantly higher. The Zillow median price for a 2BR unit is $419,515, which translates to a monthly mortgage payment of approximately $2200 assuming a 4.5% interest rate and a 30-year fixed mortgage. Adding property taxes, insurance, and maintenance costs, the total monthly expenses could easily exceed the FMR of $2440. This means that landlords who rely solely on FMRs to cover their costs would likely face negative cash flow. Given the high demand and occupancy rates, investors might consider targeting the broader rental market rather than focusing exclusively on Section 8 tenants. However, if they do choose to participate in the Section 8 program, they should be prepared to subsidize the difference between the FMR and the actual cost of maintaining the property. #### Specific Actionable Insights 1. **Focus on Larger Units**: Since the FMR for larger units (3BR and 4BR) is higher, investors might consider acquiring properties with three or four bedrooms. The FMR for a 3BR unit is $3080, and for a 4BR unit, it is $3620. These higher FMRs can help offset some of the financial burden associated with higher property costs. 2. **Consider Non-Section 8 Tenants**: Given the high median household income and the tight rental market, investors should explore the possibility of renting to non-Section 8 tenants who can afford higher rents. This strategy can ensure better cash flow and potentially higher returns on investment. 3. **Location-Specific Pricing**: Investors should conduct thorough research on specific neighborhoods within Centreville to understand how rental prices vary. Some areas may have slightly lower rental rates, making them more feasible for Section 8 voucher holders. #### Bottom Line For Section 8-focused investors, the ZIP code 20120 is a challenging market due to the high cost of living and the significant gap between FMRs and actual rental prices. The recommendation would be to **Skip** this ZIP code unless investors are willing to accept negative cash flow or are prepared to target larger units where the FMR is higher. Alternatively, investors might consider other ZIP codes with more favorable FMR-to-rental-price ratios. If investors decide to invest in Centreville, they should diversify their tenant base beyond just Section 8 voucher holders to ensure profitability.

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.