Location: Washington-Arlington-Alexandria, DC | Metro: Washington-Arlington-Alexandria, DC-VA-MD 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 | $2,480 |
| 1 Bedroom | $2,590 |
| 2 Bedrooms | $2,860 |
| 3 Bedrooms | $3,640 |
| 4 Bedrooms | $4,290 |
| 5 Bedrooms | $4,976 |
| 6 Bedrooms | $5,573 |
| 7 Bedrooms | $6,019 |
| 8 Bedrooms | $6,320 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,860 | $418,898 | 0.68% | D |
| 3BR | $3,640 | $637,743 | 0.57% | F |
| 4BR | $4,290 | $914,835 | 0.47% | F |
| 5BR | $4,976 | $1,053,551 | 0.47% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate picture for ZIP 20165 in Sterling, VA, can be analyzed using the Fair Market Rent (FMR) and the Zillow Observed Rent Index (ZORI) for a two-bedroom apartment. The annualized FMR for a 2BR unit is $2260, while the ZORI stands at $2,347.
To derive the gross yield, we first calculate the annual rent based on these figures. For the FMR scenario, the annual rent would be $2260 multiplied by 12 months, equating to $27,120 per year. In contrast, the ZORI annual rent is $2,347 multiplied by 12, totaling $28,164 annually.
The median home value in ZIP 20165 is $748,372. Using this figure, the implied gross yield for the FMR scenario is calculated by dividing the annual rent ($27,120) by the median home value ($748,372), resulting in a gross yield of approximately 3.6%. For the ZORI scenario, the gross yield is computed similarly, with an annual rent of $28,164 divided by the median home value, leading to a gross yield of about 3.77%.
Given the 22.4% renter density and a 5-day days-on-market (DOM) average, the ZORI scenario is more realistic. This lower DOM suggests that properties in ZIP 20165 are highly sought after and likely to be rented quickly at closer to market rates. While the FMR provides a baseline for rental assistance, landlords should aim for the ZORI rate to maximize income potential.
In conclusion, for ZIP 20165, the gross yields based on the FMR and ZORI are 3.6% and 3.77%, respectively. Landlords and small-portfolio investors should consider the ZORI rate as a more accurate reflection of market conditions when evaluating the potential returns on investment in this area.
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.