Section 8 Fair Market Rent (FMR) for ZIP 21221 - 2027

Investment Score for ZIP 21221

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	$230,902	0.73%	D
3BR	$2,130	$279,387	0.76%	D
4BR	$2,350	$368,599	0.64%	D
5BR	$2,726	$450,095	0.61%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 21221 (Essex, MD) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 21221 in 2026 is set at $1770 for a two-bedroom unit. This amount represents 31.5% of the median household income in Essex, which stands at $67,340. However, the actual rental prices in the area are significantly higher, with the Zillow median price for a two-bedroom unit being $230,609. The price-to-FMR ratio of 10.9x indicates that the actual rental costs far exceed the FMR guidelines. This discrepancy means that Section 8 voucher holders face significant constraints in finding suitable housing. For example, a tenant with a voucher for a two-bedroom unit would only be able to afford rent up to $1770, which is well below the actual market rate. As a result, landlords who accept Section 8 vouchers may struggle to compete with those who do not, as they are limited by the government-set FMR rates. #### Affordability & Renter Profile In ZIP code 21221, 37.5% of the population are renters, indicating a substantial demand for rental properties. With a median household income of $67,340, many residents likely find it challenging to afford the high rental prices. The occupancy rate of 93.7% suggests that the rental market is relatively tight, with few vacancies available. Given the high cost of living and the fact that the FMR for a two-bedroom unit is only 31.5% of the median income, it is clear that the majority of renters in this area are likely to be low-income families. These families may rely heavily on assistance programs such as Section 8 to make ends meet. The high occupancy rate also implies that there is strong competition among renters for available units, making affordability a critical issue. #### Investor Angle From an investor’s perspective, the ZIP code 21221 presents a mixed picture. The FMR guidelines suggest that landlords can charge up to $1770 for a two-bedroom unit, but the actual market price is much higher at $230,609. This means that if an investor were to purchase a property and rent it out using a Section 8 voucher, they would be operating at a significant discount compared to the market rate. To determine if this ZIP code is cash-flow positive at FMR, we need to consider the typical expenses associated with owning and renting out a property. Assuming a conservative estimate of 1% of the purchase price as monthly maintenance and property management costs, this would equate to approximately $1921 per month for a $230,609 property. Given that the FMR for a two-bedroom unit is $1770, the investor would not achieve positive cash flow without additional subsidies or other revenue sources. Furthermore, the investment grade in this area is likely to be lower due to the tight rental market and the high cost of living. Investors should carefully weigh the risks and rewards before entering this market, especially if they plan to rely solely on Section 8 vouchers for rental income. #### Specific Actionable Insights 1. **Target Lower-Rent Properties**: Investors should focus on acquiring properties that are closer to the FMR guidelines. For instance, a one-bedroom unit with an FMR of $1450 might be more feasible for positive cash flow when considering the typical expenses of ownership. This strategy could help mitigate the risk of negative cash flow. 2. **Consider Multi-Family Units**: Since the FMR for larger units (e.g., three-bedroom at $2280) is still a fraction of the median income, multi-family units might offer better opportunities. By targeting these larger units, investors can potentially attract families who have a higher income and thus can contribute more towards the overall rent, improving cash flow. 3. **Explore Additional Revenue Streams**: To offset the lower rental income from Section 8 vouchers, investors could explore additional revenue streams such as offering amenities like laundry facilities, parking, or storage space for extra fees. This approach can help improve the financial viability of the investment. #### Bottom Line Based on the provided data, the recommendation for Section 8-focused investors in ZIP code 21221 is to **skip** this market. The high price-to-FMR ratio and the tight rental market indicate that achieving positive cash flow will be challenging. Additionally, the high cost of living and the limited number of properties that fall within the FMR guidelines make it difficult to find profitable investment opportunities. Investors looking to enter the Section 8 market should consider areas with a more favorable price-to-FMR ratio and less competitive rental markets.

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.