Location: Baltimore-Columbia-Towson, MD | Metro: Baltimore-Columbia-Towson, MD MSA
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 | $2,040 |
| 1 Bedroom | $2,180 |
| 2 Bedrooms | $2,690 |
| 3 Bedrooms | $3,360 |
| 4 Bedrooms | $3,740 |
| 5 Bedrooms | $4,338 |
| 6 Bedrooms | $4,859 |
| 7 Bedrooms | $5,248 |
| 8 Bedrooms | $5,510 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $2,180 | $370,298 | 0.59% | F |
| 2BR | $2,690 | $447,227 | 0.6% | D |
| 3BR | $3,360 | $638,814 | 0.53% | F |
| 4BR | $3,740 | $883,233 | 0.42% | F |
| 5BR | $4,338 | $1,158,002 | 0.37% | F |
U.S. Census Bureau data (2024)
The Section 8 program in ZIP code 21401, located in Annapolis, Maryland, presents a unique opportunity for landlords and small-portfolio investors due to the disparity between the Fair Market Rent (FMR) and the actual market rent. For fiscal year 2024, the FMR stands at $2,500, while the Zillow Observed Rent Index (ZORI) indicates that the average market rent is $2,268. This means the FMR is $232 higher than the market rate, or an increase of approximately 10.2%.
The gap between FMR and market rent suggests that voucher tenants can be a significant yield play for landlords in this area. By accepting Section 8 vouchers, landlords ensure a steady and government-backed income stream that exceeds the prevailing market rents. In Annapolis, where 34.6% of residents are renters, the demand for affordable housing is strong. With a median home value of $625,105 and a median income of $123,381, many residents rely on rental assistance programs to find suitable housing.
However, landlords must also consider the potential costs associated with housing voucher tenants below open-market rates. Despite the higher FMR, the administrative burden and sometimes slower payment processes can offset the higher rental income. It's important for landlords to weigh these factors against the benefits of stable tenancy and the ability to tap into a segment of the rental market that might otherwise be inaccessible due to affordability concerns.
In summary, the FMR exceeding the market rent by $232 or 10.2% in ZIP 21401 makes it a lucrative opportunity for landlords willing to navigate the intricacies of the Section 8 program. The high median home value and median income in Annapolis further underscore the need for affordable housing options, making the decision to accept vouchers a strategic one for maximizing rental yields.
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.