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 | $1,940 |
| 1 Bedroom | $2,030 |
| 2 Bedrooms | $2,240 |
| 3 Bedrooms | $2,850 |
| 4 Bedrooms | $3,360 |
| 5 Bedrooms | $3,898 |
| 6 Bedrooms | $4,366 |
| 7 Bedrooms | $4,715 |
| 8 Bedrooms | $4,951 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,240 | $330,527 | 0.68% | D |
| 3BR | $2,850 | $389,312 | 0.73% | D |
| 4BR | $3,360 | $430,090 | 0.78% | D |
| 5BR | $3,898 | $464,991 | 0.84% | C |
U.S. Census Bureau data (2024)
The ZIP code 20722, known as Cottage City, MD, presents an interesting scenario when analyzed from the perspective of renters. The median household income in this area stands at $91,875, which provides a benchmark for understanding the financial capabilities of residents.
Considering the market rate for rent, known as the Zillow Observed Rent Index (ZORI), at $2,475, it becomes evident that renting at the market rate can be challenging for many households. To put this into perspective, a household earning the median income would allocate approximately 31% of their monthly income towards rent at the ZORI rate. This figure exceeds the generally recommended threshold of 30%, indicating a strain on household budgets.
In contrast, the Fair Market Rent (FMR) for ZIP 20722 in fiscal year 2024 is set at $1,920. This is the standard payment amount for housing vouchers, such as those provided through the Section 8 program. At this rate, a household would spend roughly 24% of their monthly income on rent, which is significantly more affordable and aligns better with financial planning guidelines.
With 35.1% of the population being renters and a total population of 6,264, the affordability gap between the ZORI and FMR rates has implications for landlord competition. Many renters are likely to seek properties that accept vouchers due to the financial burden of paying market-rate rents. This preference could lead to a higher demand for properties that participate in the Section 8 program, thereby increasing competition among landlords who do not offer such options.
The takeaway for landlords considering their strategy is clear: accepting vouchers can attract a significant portion of the rental market, especially those who find market-rate rents unaffordable. While voucher payments are lower, they ensure a steady stream of reliable tenants. Landlords should weigh the benefits of long-term stability against the potential for higher immediate cash flow from market-rate rents.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). 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.