Section 8 Fair Market Rent (FMR) for ZIP 20686 - 2027

FY 2027 Fair Market Rent Rates

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

To determine if a landlord should invest in ZIP code 20686 for Section 8 properties, follow this decision tree based on the available data.

Step 1: Does the Fair Market Rent (FMR) of $1730 for the fiscal year 2024 cover the debt service on a property in this area?

• Yes: If the FMR of $1730 is sufficient to cover your debt service, then proceed to Step 2.
• No: If the FMR does not cover your debt service, purchasing a Section 8 property in 20686 would not be financially viable. Look for areas where the FMR exceeds your debt service costs.

Step 2: Is the market rent above, at, or below the FMR of $1730?

• Above: If the market rent is higher than $1730, you might consider other investment options that can yield higher returns. However, Section 8 properties provide stable income and low vacancy rates, which could still be attractive despite lower rent compared to market rates.
• At: If the market rent equals the FMR, investing in Section 8 properties would align perfectly with the maximum allowable rent, ensuring compliance without sacrificing potential rental income.
• Below: If the market rent is below $1730, Section 8 properties could offer better returns than the general market, making them a strong choice for investment.

Step 3: Do the percentage of renters and the days on market (DOM) indicate sufficient demand?

• It depends: With the percentage of renters and DOM not specified, evaluate these factors based on local real estate trends. A high percentage of renters combined with a low DOM suggests strong demand, making Section 8 investments in 20686 more likely to succeed. Conversely, low percentages of renters and high DOM indicate weaker demand, potentially leading to higher vacancy rates and less profitability.

In conclusion, the viability of purchasing a Section 8 property in ZIP code 20686 hinges on whether the FMR of $1730 covers your debt service, how it compares to the market rent, and the overall demand indicated by the percentage of renters and DOM. Use this framework to make an informed decision tailored to your financial goals and risk tolerance.

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.