Location: Washington-Arlington-Alexandria, DC | Metro: St. Mary's County, MD HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,300 |
| 1 Bedroom | $1,580 |
| 2 Bedrooms | $1,720 |
| 3 Bedrooms | $2,160 |
| 4 Bedrooms | $2,750 |
| 5 Bedrooms | $3,190 |
| 6 Bedrooms | $3,573 |
| 7 Bedrooms | $3,859 |
| 8 Bedrooms | $4,052 |
U.S. Census Bureau data (2024)
A decision tree for ZIP 20659 (Mechanicsville, MD) regarding Section 8 investments can be structured around three key questions:
1) Does the Fair Market Rent (FMR) of $1660 cover the debt service on a property valued at $434,988?
No. The FMR of $1660 does not sufficiently cover the debt service on a property costing $434,988. Assuming a typical mortgage rate of around 5%, the annual debt service would be approximately $21,749. This translates to a monthly payment of about $1,812, which is higher than the FMR. Therefore, relying solely on Section 8 tenants would result in insufficient rental income to meet the monthly mortgage obligations.
2) Is the market rent of $1,527 above, at, or below the FMR?
Below. The market rent of $1,527 is below the FMR of $1660. This indicates that Section 8 tenants could potentially pay a higher rent compared to what the market currently offers. However, this alone does not justify investment if the FMR cannot cover the debt service.
3) Are the 11.4% renters plus the day DOM (Days on Market) indicative of sufficient demand?
It depends. With 11.4% of the population renting, there is some demand present. However, the lack of data on days on market (DOM) makes it difficult to assess the speed at which properties are rented out. If the DOM is short, it suggests strong demand. Conversely, if DOM is long, it implies weaker demand. Additionally, the percentage of renters must be considered alongside the total number of households. A small number of households would mean limited overall demand despite a high percentage renting.
In conclusion, for a landlord asking whether they should invest in ZIP 20659 for Section 8 properties, the answer is generally No. The primary reason is that the FMR of $1660 is insufficient to cover the debt service on a $434,988 property. Even though the market rent is lower than the FMR, indicating potential for higher rents from Section 8 tenants, the inability to meet debt obligations remains a critical issue. The demand assessment based on renter percentage and DOM is inconclusive without additional data on the total number of households and the actual days on market.
Data Sources: FMR data from HUD (2027). 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.