Section 8 Fair Market Rent (FMR) for ZIP 20774 - 2027

Investment Score for ZIP 20774

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	$2,340
1 Bedroom	$2,440
2 Bedrooms	$2,700
3 Bedrooms	$3,440
4 Bedrooms	$4,050
5 Bedrooms	$4,698
6 Bedrooms	$5,262
7 Bedrooms	$5,683
8 Bedrooms	$5,967

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
1BR	$2,440	$154,889	1.58%	A+
2BR	$2,700	$291,176	0.93%	C
3BR	$3,440	$433,806	0.79%	D
4BR	$4,050	$542,063	0.75%	D
5BR	$4,698	$716,878	0.66%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 20774 (Upper Marlboro, MD) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 20774 is set by HUD for the year 2026. The FMRs for various bedroom sizes are as follows: - 0BR: $2130 - 1BR: $2200 - 2BR: $2450 (which is 22.9% of the median household income) - 3BR: $3090 - 4BR: $3630 These figures represent the maximum amount that a Section 8 voucher holder can pay towards rent. However, it is important to compare these FMRs to the actual rental rates in the area to understand the dynamics better. According to the data provided, the Zillow median price for a 2BR home is $291,758. This translates to a monthly mortgage payment of approximately $1,400 based on a 30-year fixed-rate mortgage at a typical interest rate of around 5%. When we consider property taxes, insurance, and maintenance costs, the total cost to landlords would be higher. Given the high price-to-FMR ratio of 9.9x, it is evident that the actual rents in Upper Marlboro far exceed the FMRs. For instance, a 2BR unit priced at $291,758 would likely have a rental price well above $2450 per month. This means that voucher holders face significant constraints in finding suitable housing within their budget. Landlords may also be hesitant to accept vouchers due to the disparity between the FMR and the market rent. #### Affordability & Renter Profile The median household income in ZIP 20774 is $128,259, which is relatively high compared to the national average. With 24.4% of residents being renters, the demand for rental properties is moderate. Given that the FMR for a 2BR unit is only 22.9% of the median income, it suggests that most residents can afford to rent without needing assistance. However, the high occupancy rate of 96.6% indicates that there is little vacancy, making it a tight market for both renters and landlords. The affordability issue is particularly acute for those relying on Section 8 vouchers. The FMR for a 2BR unit is $2450, but the actual market rent is likely much higher given the price-to-FMR ratio. This makes it challenging for voucher holders to find affordable housing, especially since the majority of residents can afford higher rents. #### Investor Angle From an investor perspective, the ZIP code 20774 presents a mixed picture. The high median household income and low vacancy rate suggest strong demand for rental properties. However, the price-to-FMR ratio of 9.9x indicates that rents are significantly higher than the FMRs, which could deter voucher holders from renting in this area. To determine if this ZIP code is cash-flow positive at FMR, we need to consider the potential rental income against the costs. If a landlord were to rent out a 2BR unit at the FMR of $2450, they would need to ensure that this covers all expenses including mortgage payments, property taxes, insurance, maintenance, and any other costs associated with owning and managing the property. Given the high median home price and the tight market, it is likely that landlords would prefer to rent at market rates rather than FMR. The investment grade for this ZIP code is moderate. While there is strong demand and a high occupancy rate, the challenge lies in attracting tenants who can pay market rates. Investors focusing solely on Section 8 vouchers may find it difficult to achieve positive cash flow due to the high market rents. #### Specific Actionable Insights 1. **Focus on Higher-Income Tenants**: Given the high median household income and the tight market, investors should focus on attracting tenants who can pay market rates. This would likely result in better cash flow and a higher return on investment. For example, targeting a 2BR unit at $2,900 per month instead of the FMR of $2,450 could make the difference between a break-even scenario and a profitable one. 2. **Consider Location and Amenities**: To attract higher-income tenants, investors should consider the location and amenities of the properties. Units located in desirable areas with good schools, low crime rates, and access to public transportation are likely to command higher rents. Additionally, offering modern amenities such as updated kitchens, bathrooms, and energy-efficient appliances can help justify higher rental prices. 3. **Diversify Tenant Mix**: While the tight market suggests strong demand, diversifying the tenant mix can mitigate risks. This could involve a combination of market-rate tenants and some voucher holders. By having a portion of the units rented at FMR, investors can still benefit from the overall strong rental market while providing affordable housing options. #### Bottom Line For Section 8-focused investors, the recommendation is to **skip** this ZIP code. The high price-to-FMR ratio and tight market conditions make it challenging to find properties where the FMR can cover all costs. Instead, investors might want to look for areas with lower ratios and more affordable housing options. For general investors, the ZIP code offers a **hold** recommendation, as the strong demand and high median income support positive cash flow when renting at market rates. However, the risk of vacancy is low, and the potential returns are moderate.

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.