Section 8 Fair Market Rent (FMR) for ZIP 20902 - 2027

Investment Score for ZIP 20902

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	$2,240
1 Bedroom	$2,340
2 Bedrooms	$2,590
3 Bedrooms	$3,300
4 Bedrooms	$3,890
5 Bedrooms	$4,512
6 Bedrooms	$5,053
7 Bedrooms	$5,457
8 Bedrooms	$5,730

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	$2,340	$170,038	1.38%	A
2BR	$2,590	$314,429	0.82%	C
3BR	$3,300	$538,941	0.61%	D
4BR	$3,890	$615,041	0.63%	D
5BR	$4,512	$673,861	0.67%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 20902 (Silver Spring, DC) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 20902 is set by HUD for the year 2026. For a two-bedroom unit, the FMR is $2390, which represents 25.1% of the median household income of $114,486. This indicates that the rent is relatively affordable compared to the local income levels. However, the actual rental market in Silver Spring is significantly higher. According to Zillow, the median price for a two-bedroom home is $321,535, translating to a monthly mortgage payment of approximately $1500 if financed at a typical rate. When considering property taxes, insurance, and maintenance costs, the total cost of ownership can easily exceed the FMR. The price-to-FMR ratio of 11.2x suggests that the actual market rents are much higher than the FMR. For instance, a two-bedroom unit priced at $321,535 would have a monthly mortgage payment of around $1500, but when combined with other expenses, it could easily reach $2000-$2500 per month. This means that voucher holders face significant constraints in finding units that accept their vouchers and are within the FMR limits. The high ratio also implies that landlords who participate in the Section 8 program must be willing to accept lower rents than what the market might bear. #### Affordability & Renter Profile In ZIP code 20902, 35.6% of households are renters, indicating a substantial demand for rental properties. The occupancy rate of 95.8% suggests that the rental market is quite tight, with very few vacant units available. Given the median household income of $114,486, most residents can afford market-rate housing, but the 35.6% who are renters likely include a mix of young professionals, families, and individuals who may struggle with the high cost of living in the area. The FMR for a three-bedroom unit is $3020, which is still only 26.4% of the median income. This makes it feasible for many residents to afford larger units, but the challenge remains in finding units that will accept Section 8 vouchers at these rates. The high occupancy rate and the tight rental market indicate that there is little room for new entrants unless they can offer competitive amenities or pricing. #### Investor Angle From an investor perspective, the ZIP code 20902 presents both opportunities and challenges. The FMR for a two-bedroom unit is $2390, which is well below the median market rent. If an investor is able to secure a property at or near the FMR, they could potentially achieve positive cash flow. However, given the high price-to-FMR ratio of 11.2x, it is unlikely that an investor would find properties at such low prices. To determine the investment grade, we need to consider factors like vacancy rates, tenant turnover, and the overall stability of the rental market. With an occupancy rate of 95.8%, the risk of vacancy is low. However, the tight market and high competition suggest that attracting tenants who can pay market rates might be difficult. Investors should also factor in the administrative burden and potential delays associated with the Section 8 program. Given the high median household income and the strong demand for rental properties, the investment grade for this ZIP code is moderate to high, assuming the investor can navigate the complexities of the Section 8 program effectively. #### Specific Actionable Insights 1. **Focus on Larger Units**: Given the high FMR for larger units, investors should consider acquiring three- or four-bedroom properties. The FMR for a three-bedroom unit is $3020, and for a four-bedroom unit, it is $3550. These rates are closer to the market average and provide better cash flow potential. 2. **Enhance Property Value**: To attract tenants who can pay market rates, investors should consider enhancing the value of their properties through renovations or upgrades. This could include adding modern appliances, improving insulation, or upgrading the exterior. Such improvements can justify higher rents and make the property more attractive to a broader range of tenants. 3. **Consider Alternative Rental Programs**: While Section 8 provides a stable source of income, investors might want to explore alternative rental programs that offer higher rents. For example, the Low-Income Housing Tax Credit (LIHTC) program allows for slightly higher rents while still providing subsidies to low-income tenants. This could be a more lucrative option for investors looking to maximize returns. #### Bottom Line For Section 8-focused investors, the ZIP code 20902 presents a challenging yet potentially rewarding market. The high price-to-FMR ratio and tight rental market mean that securing properties at or near FMR is difficult. However, the strong demand for rental units and the high median household income suggest that there is a solid base of potential tenants. **Recommendation**: Hold. Investors should hold onto existing properties and consider enhancements to improve cash flow. Acquiring new properties at FMR is unlikely, so focusing on alternative subsidy programs or targeting larger units may be more practical.

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.