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 | $1,810 |
| 1 Bedroom | $1,890 |
| 2 Bedrooms | $2,090 |
| 3 Bedrooms | $2,660 |
| 4 Bedrooms | $3,140 |
| 5 Bedrooms | $3,642 |
| 6 Bedrooms | $4,079 |
| 7 Bedrooms | $4,405 |
| 8 Bedrooms | $4,625 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,890 | $189,867 | 1% | C |
| 2BR | $2,090 | $320,044 | 0.65% | D |
| 3BR | $2,660 | $703,150 | 0.38% | F |
| 4BR | $3,140 | $852,702 | 0.37% | F |
| 5BR | $3,642 | $1,016,880 | 0.36% | F |
U.S. Census Bureau data (2024)
In Takoma Park, MD (ZIP 20912), the Federal Market Rent (FMR) for fiscal year 2024 is set at $1,640. This figure raises immediate questions regarding its adequacy to cover the mortgage on a median-priced home valued at $688,440. To assess this, we must consider the typical interest rates and loan terms. Assuming a 30-year fixed-rate mortgage at an average rate of around 5%, the monthly mortgage payment on a $688,440 home would be approximately $3,700. Clearly, the FMR of $1,640 is insufficient to cover this amount without significant subsidies or other income sources.
The second objection concerns the level of renter demand in the area. At 55.1%, it might seem that a majority of homes are occupied by owners rather than renters. However, this percentage still represents a substantial portion of the housing market. With over half of the properties potentially available for rental, there is a notable opportunity for landlords and small-portfolio investors. Additionally, the high cost of homeownership in the region can push many individuals towards renting, further bolstering demand.
The final concern is whether Housing Choice Vouchers will keep pace with the market rents of $1,505. According to the data, the voucher payment standards are adjusted annually based on local market conditions. While these adjustments aim to reflect changes in the rental market, they do not always fully match increases. In ZIP 20912, landlords should monitor local HUD announcements closely to stay informed on any changes to voucher payment standards. It's important to note that even if vouchers don't cover the entire rent, they can still significantly reduce the financial burden on tenants, making the property more attractive to those who qualify.
While the data provides insights into these objections, it does not fully resolve all uncertainties. For instance, the exact future adjustments to voucher payments remain unknown. However, the analysis above offers a clear picture of the challenges and opportunities present in ZIP 20912 for those considering investment in Section 8 properties.
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.