Section 8 Fair Market Rent (FMR) for ZIP 21206 - 2027

Investment Score for ZIP 21206

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	$1,230
1 Bedroom	$1,360
2 Bedrooms	$1,680
3 Bedrooms	$2,130
4 Bedrooms	$2,350
5 Bedrooms	$2,726
6 Bedrooms	$3,053
7 Bedrooms	$3,297
8 Bedrooms	$3,462

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	$1,680	$178,852	0.94%	C
3BR	$2,130	$230,277	0.92%	C
4BR	$2,350	$294,295	0.8%	D
5BR	$2,726	$337,616	0.81%	C

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 21206 (Baltimore, MD) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 21206 is set by HUD for 2026 as follows: - 0BR: $1270 - 1BR: $1450 - 2BR: $1770 - 3BR: $2280 - 4BR: $2550 Comparing these figures to the actual rental market, we can see that the FMR for a 2BR unit is $1770, which represents 32.9% of the median household income of $64,531. This suggests that the rent for a 2BR unit is relatively affordable for the average resident, but it still places a significant burden on those who rely solely on their income without additional assistance. For Section 8 voucher holders, the constraints are clear. The voucher amount is tied to the FMR, meaning that a voucher holder could be eligible for up to $1770 for a 2BR unit. However, if the actual market rent exceeds this amount, the tenant would have to cover the difference out-of-pocket, which can be challenging given the percentage of income already allocated to rent. #### Affordability & Renter Profile ZIP code 21206 has a population of 48,902, with 46.8% of residents being renters. The occupancy rate stands at 92.8%, indicating a robust demand for rental properties. Given that the median household income is $64,531, the rent for a 2BR unit at $1770 is indeed a substantial portion of the average income, making affordability a key issue for many residents. The Zillow median price for a 2BR home is $176,506, which is significantly higher than the FMR. The price-to-FMR ratio for a 2BR unit is 8.3x, suggesting that the market is quite tight and there is limited supply relative to demand. This high ratio indicates that owning a property is much more expensive than renting, further reinforcing the importance of rental housing for many residents. #### Investor Angle From an investor’s perspective, the cash flow potential at FMR levels needs careful consideration. The FMR for a 2BR unit is $1770, while the Zillow median price of $176,506 implies a purchase price that is nearly eight times the monthly rent. To determine if this ZIP is cash-flow positive, we need to look at the typical expenses associated with owning a rental property. Assuming a conservative estimate of 1% annual maintenance costs, 1% property tax, and 0.5% insurance, the total monthly cost for a 2BR unit purchased at $176,506 would be approximately $1,765.06 / 12 months = $147.09 per month for maintenance, $1765.06 / 12 months = $147.09 per month for taxes, and $1765.06 * 0.5% / 12 months = $7.35 per month for insurance. Adding these up gives us $301.53 in monthly expenses. Subtracting these expenses from the FMR rent of $1770 leaves a net cash flow of $1468.47 per month. This is a positive cash flow, but it must be considered against other factors such as vacancy rates, management fees, and potential capital appreciation. Given the occupancy rate of 92.8%, the risk of vacancy is relatively low. Management fees typically range between 8-10% of the monthly rent, so for a 2BR unit, this would be around $141.60 per month. Thus, the net cash flow after management fees would be approximately $1326.87 per month. In terms of investment grade, the high price-to-FMR ratio and the relatively low vacancy risk suggest that this ZIP code is a moderate to high-risk investment. The high purchase price means that any downturn in the market could result in significant losses. However, the strong demand and positive cash flow make it a potentially attractive investment for those willing to take on the risk. #### Specific Actionable Insights 1. **Focus on 2BR Units**: Given the high price-to-FMR ratio and the fact that 2BR units are most aligned with the median income, investors should focus on acquiring 2BR units. These units are likely to be the most sought-after by tenants and will provide the best balance between rental income and purchase price. 2. **Consider Lower BR Units for Cash Flow**: While 2BR units offer a good balance, lower BR units (0BR and 1BR) might provide better cash flow due to lower FMRs. For example, a 1BR unit with an FMR of $1450 would have a net cash flow of about $1152.91 per month after management fees, assuming similar expenses. 3. **Monitor Vacancy Rates**: With an occupancy rate of 92.8%, it is crucial to monitor any changes in the local economy or housing market that could affect vacancy rates. A slight increase in vacancies could significantly impact cash flow, so investors should be prepared to manage their properties effectively to maintain high occupancy rates. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 21206 is to **Buy** with caution. The high price-to-FMR ratio makes it a risky investment, but the strong demand and positive cash flow from 2BR units can make it worthwhile. Investors should focus on properties that align well with the FMRs and consider diversifying into lower BR units to improve cash flow. Additionally, they should be prepared to manage their properties closely to ensure high occupancy rates and mitigate risks associated with potential economic shifts.

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.