Location: Kent County, MD | Metro: Kent County, MD
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 | $960 |
| 1 Bedroom | $1,130 |
| 2 Bedrooms | $1,260 |
| 3 Bedrooms | $1,620 |
| 4 Bedrooms | $2,020 |
| 5 Bedrooms | $2,343 |
| 6 Bedrooms | $2,624 |
| 7 Bedrooms | $2,834 |
| 8 Bedrooms | $2,976 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,620 | $336,002 | 0.48% | F |
U.S. Census Bureau data (2024)
A skeptical investor might question whether the Fair Market Rent (FMR) of $1,240 in ZIP 21678 will sufficiently cover the mortgage on a home priced at $371,554. To address this concern, let's consider current mortgage rates. According to recent data, the median mortgage rate for the area is around 6%. A $371,554 home with a 6% interest rate would result in a monthly mortgage payment of approximately $2,150, assuming a 20-year term and a 20% down payment. This amount exceeds the FMR by nearly $910, indicating that relying solely on FMR would not cover the mortgage.
Another objection could be the low renter demand, represented by the 8.4% rental occupancy rate. However, this figure alone does not provide a complete picture of the rental market dynamics. It's essential to look at the broader context, such as the number of renters in the area and the vacancy rate. The rental occupancy rate suggests that while there is a significant proportion of homeowners, there is still a segment of the population renting. This means that there is potential demand, but it requires careful tenant selection to ensure stable occupancy.
The final concern is whether Housing Choice Vouchers will keep pace with market rents, which are currently at $2,033. While the voucher program aims to cover a substantial portion of market rents, it is subject to federal funding and adjustments. In ZIP 21678, the average voucher amount is lower than the market rent. Landlords who accept vouchers must understand that they may not fully cover the market rent, and there could be discrepancies depending on the household's income level and the voucher allocation process.
In summary, while the FMR of $1,240 in ZIP 21678 is insufficient to cover a mortgage on a $371,554 home, there is still a viable rental market with 8.4% occupancy. However, landlords should be prepared for the possibility that vouchers may not fully align with current market rents of $2,033. Careful planning and understanding of the local market conditions are crucial for success in this area.
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.