Section 8 Fair Market Rent (FMR) for ZIP 21502 - 2027

Investment Score for ZIP 21502

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	$860
1 Bedroom	$890
2 Bedrooms	$1,010
3 Bedrooms	$1,390
4 Bedrooms	$1,480
5 Bedrooms	$1,717
6 Bedrooms	$1,923
7 Bedrooms	$2,077
8 Bedrooms	$2,181

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	$1,010	$122,642	0.82%	C
3BR	$1,390	$166,544	0.83%	C
4BR	$1,480	$227,157	0.65%	D
5BR	$1,717	$259,321	0.66%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 21502 (Cumberland, MD) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 21502, Cumberland, MD, is set by HUD for 2026. For a two-bedroom unit, the FMR is $1010, which represents approximately 20% of the median household income of $60,725. This means that a household earning the median income would have to spend around $1010 per month on rent for a two-bedroom unit. However, the actual median rent price for a two-bedroom unit, according to Zillow, is $118,701, which translates to a monthly rent of approximately $989.25 if we assume a 12-month period. The FMR is slightly higher at $1010, indicating that voucher holders might face some constraints in finding affordable housing. The difference between the FMR and the actual rent suggests that voucher holders can find units within their budget, but they may need to be selective about location and amenities. #### Affordability & Renter Profile In Cumberland, MD, 28% of the population are renters, which indicates a moderate rental market. With a median household income of $60,725, the affordability of housing is a significant concern for many residents. The occupancy rate of 83.8% suggests that there is a relatively balanced market, neither overly tight nor oversupplied. Given that the FMR for a two-bedroom unit is $1010, which is only 20% of the median income, it implies that the majority of residents can afford to rent a two-bedroom unit without assistance. However, the lower-income segment of the population, particularly those relying on Section 8 vouchers, will find it challenging to secure housing that fits within their budget. #### Investor Angle From an investor’s perspective, the ZIP code 21502 offers a mixed landscape. The price-to-FMR ratio of 9.8x for a two-bedroom unit indicates that the purchase price of properties is significantly higher compared to the rent they generate. For instance, a property purchased at the median price of $118,701 would yield a monthly rent of $989.25 based on the Zillow median. This high ratio suggests that while there is demand for rental properties, the returns on investment may be lower due to the high cost of entry. To determine if this ZIP code is cash-flow positive at FMR, we need to consider the typical operating expenses and mortgage payments. Assuming a conservative estimate of 1% of the purchase price as monthly maintenance costs, this would amount to $989.25 * 0.01 = $9.89. If we further assume a 30-year fixed-rate mortgage at 4.5%, the monthly payment on a $118,701 property would be approximately $580. Adding the maintenance costs, the total monthly expense would be around $589.89. With a monthly rent of $989.25, the net cash flow would be $989.25 - $589.89 = $399.36. This positive cash flow suggests that investing in rental properties in this area could be profitable, especially if the investor can manage the property efficiently. However, the investment grade for this ZIP code is moderate. While there is a positive cash flow, the high price-to-FMR ratio indicates that the initial investment is substantial relative to the rental income generated. Investors should carefully evaluate the long-term prospects and potential appreciation of properties in this area before making a decision. #### Specific Actionable Insights 1. **Focus on Two-Bedroom Units**: Given that the FMR for a two-bedroom unit is $1010 and the median rent is $989.25, there is a slight gap where investors can offer competitive rents while still maintaining profitability. Investing in two-bedroom units could provide a balance between demand and affordability. 2. **Consider Location and Amenities**: Since the FMR is slightly higher than the median rent, investors should focus on properties that offer good value for the rent. This includes properties in desirable locations or with additional amenities that can justify a higher rent within the FMR limits. 3. **Evaluate Long-Term Appreciation Potential**: Despite the high price-to-FMR ratio, investors should assess whether there is potential for long-term appreciation in property values. If Cumberland, MD, is experiencing economic growth or development, this could offset the initial high investment costs. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 21502 is to **Hold**. While there is a positive cash flow from renting out properties at FMR levels, the high price-to-FMR ratio makes the initial investment costly. It is advisable to wait for more favorable market conditions or to seek properties with strong appreciation potential. Additionally, investors should ensure they understand the local rental market dynamics and the availability of Section 8 vouchers to make informed decisions.

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.