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 |
|---|---|---|---|---|
| 1BR | $2,030 | $176,358 | 1.15% | B |
| 2BR | $2,240 | $264,033 | 0.85% | C |
| 3BR | $2,850 | $389,486 | 0.73% | D |
| 4BR | $3,360 | $510,918 | 0.66% | D |
| 5BR | $3,898 | $677,036 | 0.58% | F |
U.S. Census Bureau data (2024)
Montgomery Village, located in Montgomery County, Maryland, is part of a larger community with a total population of 34,718 residents. The area has a significant rental market, with 31.1% of the population being renters. The median household income in this region stands at $98,542, indicating a middle to upper-middle class demographic. The median home value in the area is $388,806, reflecting the overall cost of living and property values.
The rent economics in ZIP code 20886 provide a clear picture of the investment potential. The Fair Market Rent (FMR) for the zip code for fiscal year 2024 is set at $1,920, which is notably lower than the market rent of $2,514, as indicated by ZORI (Zillow Observed Rent Index). This disparity suggests that there is a significant opportunity for landlords and small-portfolio investors to capitalize on the difference between government-subsidized rents and the actual market rates.
Given these figures, the area is suitable for both hands-off voucher operators and hands-on value-add buyers. Voucher operators can benefit from the lower FMR, ensuring steady, government-backed income. On the other hand, value-add buyers have the potential to increase their rental income beyond the subsidized rates, leveraging the higher market rent to maximize profits. However, it's crucial to understand the local regulations and the demand for Section 8 properties in this neighborhood before making any investment decisions.
To conclude, Montgomery Village in ZIP code 20886 offers a balanced mix of affordability and middle-class stability, with clear economic advantages for those willing to engage in the Section 8 housing market. Whether you choose a passive or active approach, the data points towards a favorable environment for real estate investment.
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.