Section 8 Fair Market Rent (FMR) for ZIP 21701 - 2027

Investment Score for ZIP 21701

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	$1,800
1 Bedroom	$1,880
2 Bedrooms	$2,080
3 Bedrooms	$2,650
4 Bedrooms	$3,120
5 Bedrooms	$3,619
6 Bedrooms	$4,053
7 Bedrooms	$4,377
8 Bedrooms	$4,596

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
1BR	$1,880	$292,515	0.64%	D
2BR	$2,080	$332,306	0.63%	D
3BR	$2,650	$431,881	0.61%	D
4BR	$3,120	$536,803	0.58%	F
5BR	$3,619	$734,153	0.49%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 21701 (Frederick, MD) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 21701 is set by HUD for 2026 as follows: - 0BR: $1620 - 1BR: $1670 - 2BR: $1860 (which is 20.9% of the median household income) - 3BR: $2350 - 4BR: $2760 To understand how these figures compare to actual rents, we must consider the price-to-FMR ratio. According to the provided data, the Zillow median price for a 2BR unit is $334,351, which translates to a rental value of approximately $15.0x the FMR. This means that the actual rent for a 2BR unit is around $1860 * 15 = $27,900 per year or roughly $2,325 per month. Given that the FMR for a 2BR unit is $1860, voucher holders face significant constraints. They can only afford units that are priced at or below the FMR, which is far below the actual market rent. This makes it challenging for voucher recipients to find suitable housing within their budget, especially since the actual market rent is much higher than the FMR. #### Affordability & Renter Profile ZIP code 21701 has a population of 43,048, with 33.8% of residents being renters. The occupancy rate stands at 95.6%, indicating a robust demand for rental properties. Given the median household income of $106,577, the majority of residents can afford market-rate rentals, but those relying on Section 8 vouchers face considerable challenges. The affordability gap is stark when comparing the FMR to the actual market rent. For instance, a 2BR unit priced at $2,325 per month is nearly 1.25 times the FMR of $1860. This suggests that the market is tight, with limited options for low-income renters who depend on government assistance. #### Investor Angle From an investor perspective, the ZIP code 21701 presents a mixed scenario. The FMR for a 2BR unit is $1860, while the actual market rent is approximately $2,325. This indicates that properties rented at FMR levels would likely generate negative cash flow for investors, given the higher market rates. The investment grade in this area is relatively high due to the strong demand and high median household income. However, the challenge lies in finding properties that are both affordable for Section 8 voucher holders and profitable for investors. The current market conditions suggest that there is a scarcity of such opportunities. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors should focus on smaller units such as 0BR or 1BR apartments. These units have lower FMRs ($1620 and $1670 respectively), making them more likely to be rented out at or near the FMR without significant loss. 2. **Consider Outlying Areas**: Investors might want to look into outlying areas within Frederick County where the price-to-FMR ratio is lower. This could provide better opportunities for cash flow-positive investments while still catering to the needs of Section 8 voucher holders. 3. **Develop Relationships with Local Landlords**: Building relationships with local landlords who are willing to accept Section 8 vouchers can help investors identify properties that are more affordable for voucher holders. This can also lead to long-term tenancies, which are beneficial for maintaining steady cash flows. #### Bottom Line For Section 8-focused investors, the ZIP code 21701 is generally a "Skip" recommendation. The high price-to-FMR ratio and tight market conditions make it difficult to find properties that are both affordable for voucher holders and profitable for investors. Instead, investors should consider other areas within Frederick County or neighboring counties where the rental market is less competitive and the price-to-FMR ratio is more favorable.

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.