Section 8 Fair Market Rent (FMR) for ZIP 21043 - 2027

Investment Score for ZIP 21043

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	$1,880
1 Bedroom	$2,010
2 Bedrooms	$2,480
3 Bedrooms	$3,100
4 Bedrooms	$3,450
5 Bedrooms	$4,002
6 Bedrooms	$4,482
7 Bedrooms	$4,841
8 Bedrooms	$5,083

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
2BR	$2,480	$352,653	0.7%	D
3BR	$3,100	$533,311	0.58%	F
4BR	$3,450	$784,240	0.44%	F
5BR	$4,002	$945,520	0.42%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 21043 (Ellicott City, MD) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 21043 is set by HUD for 2026, with the following figures: - 0BR: $1670 - 1BR: $1850 - 2BR: $2280 (which represents 18.5% of the median household income) - 3BR: $2890 - 4BR: $3210 These FMRs represent the maximum amount that a Section 8 voucher holder can pay towards rent. However, the actual rental market in Ellicott City is significantly higher than these FMRs. For instance, the Zillow median price for a 2BR property is $353,756. This suggests that landlords would need to charge much higher rents to cover their mortgage payments, maintenance costs, and other expenses associated with owning a rental property. The price-to-FMR ratio for a 2BR unit is 12.9x, indicating that the actual rental value far exceeds the FMR. This creates significant constraints for voucher holders. They may struggle to find properties where landlords are willing to accept the lower FMR rates, especially given the high cost of living in the area. Additionally, the limited availability of affordable housing means that voucher holders might have to settle for substandard accommodations or commute long distances to work. #### Affordability & Renter Profile Ellicott City has a population of 48,525, with 33.1% of residents being renters. The occupancy rate is 96.9%, suggesting a very tight rental market with little vacancy. The median household income in the area is $148,125, which is quite high compared to national averages. This indicates that the typical resident in Ellicott City is well above the poverty line and likely has a stable financial situation. However, the high median income does not necessarily mean that all residents can afford the local rental prices. The FMR for a 2BR unit is only $2280, which is a mere 18.5% of the median household income. This implies that while some residents might be able to afford the high rents, others, particularly those relying on Section 8 vouchers, face significant challenges in finding suitable housing. Given the high occupancy rate and the relatively small percentage of renters, it is clear that the rental market in Ellicott City is highly competitive and undersupplied. This tight market makes it difficult for low-income households to secure housing without substantial assistance. #### Investor Angle From an investor's perspective, the ZIP code 21043 presents a challenging environment for cash flow positive investments at the FMR levels. The Zillow median price for a 2BR property is $353,756, and the price-to-FMR ratio is 12.9x. This means that the actual rental value is significantly higher than the FMR, making it unlikely that landlords can achieve positive cash flow while accepting Section 8 vouchers at the FMR rates. To illustrate, if a landlord were to purchase a 2BR property at the median price of $353,756, they would need to consider mortgage payments, property taxes, insurance, maintenance, and other operational costs. At an FMR of $2280 per month, the revenue generated would not be sufficient to cover these expenses, leading to negative cash flow. Furthermore, the investment grade for this ZIP code is likely to be low due to the high cost of entry into the market and the limited pool of potential tenants who can afford the FMR rates. Investors should carefully evaluate the risks and returns before committing to this market. #### Specific Actionable Insights 1. **Target Higher Rental Units**: Given the high price-to-FMR ratio, investors should focus on larger units such as 3BR or 4BR properties. These units have higher FMRs ($2890 and $3210 respectively), which might provide better opportunities for achieving positive cash flow. 2. **Consider Location-Specific Strategies**: Since the rental market is tight and undersupplied, investors could explore strategies that cater to the needs of low-income households. This could include offering amenities that make the property more attractive, such as energy-efficient appliances, modern finishes, and convenient locations near public transportation. 3. **Evaluate Non-Section 8 Opportunities**: Due to the constraints imposed by Section 8 FMRs, investors might want to consider non-Section 8 rental opportunities. This could involve targeting the broader rental market where tenants are willing to pay higher rents, or exploring alternative government programs that offer higher subsidy rates. #### Bottom Line Based on the analysis, the recommendation for Section 8-focused investors in ZIP code 21043 is to **skip** this market. The high price-to-FMR ratio and the tight rental market make it difficult to achieve positive cash flow. Instead, investors should look for areas with a more favorable balance between FMRs and actual rental values, or consider diversifying their investment strategy to include non-Section 8 rental opportunities.

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.