Section 8 Fair Market Rent (FMR) for ZIP 20706 - 2027

Investment Score for ZIP 20706

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	$1,910
1 Bedroom	$2,000
2 Bedrooms	$2,210
3 Bedrooms	$2,820
4 Bedrooms	$3,320
5 Bedrooms	$3,851
6 Bedrooms	$4,313
7 Bedrooms	$4,658
8 Bedrooms	$4,891

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
2BR	$2,210	$362,647	0.61%	D
3BR	$2,820	$418,560	0.67%	D
4BR	$3,320	$470,478	0.71%	D
5BR	$3,851	$508,235	0.76%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 20706 (Lanham-Seabrook, DC) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) figures for ZIP code 20706 (Lanham-Seabrook, DC) in 2026 indicate that a two-bedroom unit is priced at $2,060 per month. This represents approximately 23.7% of the median household income in the area, which stands at $104,523. For voucher holders, the maximum rent they can pay is capped at the FMR, meaning a two-bedroom unit would cost them $2,060 per month. However, the actual rental market in this area is significantly higher, with Zillow reporting a median price for a two-bedroom home at $361,404. This implies that the actual monthly rent for a two-bedroom unit is likely much higher than the FMR, creating a significant constraint for Section 8 voucher holders who may struggle to find affordable housing options within their budget. #### Affordability & Renter Profile In Lanham-Seabrook, 28.1% of the population are renters, indicating a substantial demand for rental properties. With a high occupancy rate of 94.5%, it suggests that the rental market is relatively tight, and there is little excess supply. Given the median household income of $104,523, the majority of residents are likely able to afford higher rents. The FMR for a two-bedroom unit is only $2,060, which is far below the actual market value, making it challenging for low-income households to secure rental properties without financial assistance. #### Investor Angle From an investor perspective, the cash flow potential at the FMR level is quite limited. The FMR for a two-bedroom unit is $2,060, while the actual median price reported by Zillow is $361,404. This translates to a price-to-FMR ratio of 14.6x, suggesting that the actual market rent is likely around $29,936 annually ($2,494.67 monthly). At the FMR, the potential rental income is only $24,720 annually ($2,060 monthly), which is significantly lower than what investors could potentially earn if they were renting out units at market rates. Given the high price-to-FMR ratio, the investment grade for properties in this ZIP code is relatively poor for Section 8-focused investors. The gap between the FMR and the actual market rent means that investors might face difficulties in finding tenants willing to pay the FMR, especially when the market rent is so much higher. Additionally, the maintenance and management costs associated with properties at these market values could further reduce the profitability for Section 8-focused investments. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Investors should consider focusing on smaller units such as one-bedroom or studio apartments, where the FMR is lower. For example, the FMR for a one-bedroom unit is $1,850, which is still a significant portion of the median income but may be more manageable for some voucher holders. This strategy could help in attracting more Section 8 tenants. 2. **Target Lower-Priced Properties**: Given the high price-to-FMR ratio, investors should target properties that are priced closer to the FMR. This could mean looking for older or less desirable properties that are more likely to be rented at or near the FMR. For instance, a property priced at $260,000 would have a price-to-FMR ratio closer to 10x, which is still high but more feasible for Section 8 tenants. 3. **Consider Mixed-Income Developments**: Another approach could be to develop mixed-income housing projects. By offering a mix of Section 8 units and market-rate units, investors can balance the lower rental income from Section 8 units with higher rental income from market-rate units. This strategy can also help in diversifying the tenant base and reducing the risk of vacancy. #### Bottom Line Based on the analysis, the recommendation for Section 8-focused investors in ZIP code 20706 (Lanham-Seabrook, DC) is to **Skip** this market. The high price-to-FMR ratio indicates that the actual market rents are substantially higher than the FMR, making it difficult for voucher holders to find suitable housing. Additionally, the tight rental market and high occupancy rate suggest that there is already strong demand for rental properties at market rates, leaving little room for profitability at the FMR levels. Investors seeking opportunities in this ZIP code should consider other strategies that do not rely solely on Section 8 vouchers for rental income.

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.