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 | $2,010 |
| 1 Bedroom | $2,100 |
| 2 Bedrooms | $2,320 |
| 3 Bedrooms | $2,960 |
| 4 Bedrooms | $3,480 |
| 5 Bedrooms | $4,037 |
| 6 Bedrooms | $4,521 |
| 7 Bedrooms | $4,883 |
| 8 Bedrooms | $5,127 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $2,100 | $195,381 | 1.07% | B |
| 2BR | $2,320 | $245,359 | 0.95% | C |
| 3BR | $2,960 | $436,108 | 0.68% | D |
| 4BR | $3,480 | $589,478 | 0.59% | F |
| 5BR | $4,037 | $753,240 | 0.54% | F |
U.S. Census Bureau data (2024)
The Section 8 thesis for ZIP code 20879, which encompasses parts of Gaithersburg, MD, highlights a significant gap between the Fair Market Rent (FMR) and the actual market rent. The FMR for the area, as set by HUD for fiscal year 2024, is $2040. In contrast, the market rent, measured by Zillow's ZORI index, stands at $2062. This creates a gap of $22, representing a 1.07% difference.
Given that the FMR is slightly lower than the market rent, landlords and small-portfolio investors must consider the implications of accepting housing voucher tenants who may pay below the open-market rate. While the gap is minimal, it still suggests that landlords might receive rents slightly below what they could achieve in the open market. However, the stability and security of rental payments through the Section 8 program can offset this minor discrepancy.
Gaithersburg, MD has a robust real estate market, with a median home value of $447,724 and a median household income of $112,104. These economic indicators suggest a strong local economy capable of supporting various types of housing investments. With 30.2% of residents being renters, there is a consistent demand for rental properties, making the area attractive for landlords and investors.
The decision to participate in the Section 8 program should be weighed against these factors. While the FMR is just under the market rent, the steady income and low vacancy rates typical of Section 8 properties can provide a reliable yield. Additionally, the program ensures that tenants are vetted and their ability to pay is guaranteed by the government, reducing the risk of non-payment and property damage.
In summary, the slight disparity between the FMR and market rent in ZIP 20879 does not significantly impact the overall attractiveness of the Section 8 program for landlords and small-portfolio investors. The stable and secure rental income, combined with the strong local economy and high demand for rentals, makes this a viable investment strategy.
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.