Location: Washington-Arlington-Alexandria, DC | Metro: Washington-Arlington-Alexandria, DC-VA-MD HUD Metro FMR Area
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 | $2,530 |
| 1 Bedroom | $2,640 |
| 2 Bedrooms | $2,920 |
| 3 Bedrooms | $3,720 |
| 4 Bedrooms | $4,380 |
| 5 Bedrooms | $5,081 |
| 6 Bedrooms | $5,691 |
| 7 Bedrooms | $6,146 |
| 8 Bedrooms | $6,453 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $3,720 | $527,154 | 0.71% | D |
| 4BR | $4,380 | $776,811 | 0.56% | F |
| 5BR | $5,081 | $939,695 | 0.54% | F |
U.S. Census Bureau data (2024)
A skeptical investor looking into ZIP 21754 might have several concerns regarding the feasibility of investing in this area under the Section 8 program. Let's address these concerns with the available data.
The first objection is whether the Fair Market Rent (FMR) of $2,030 for ZIP 21754 in fiscal year 2024 will sufficiently cover the mortgage on a home priced at $694,235. To determine this, we need to calculate the potential monthly mortgage payment based on typical lending terms. Assuming a 30-year fixed-rate mortgage at an average interest rate of 5%, the monthly mortgage payment would be approximately $3,700. Clearly, the FMR of $2,030 falls short of covering this amount. This indicates that relying solely on Section 8 rental income might not be sufficient to meet mortgage obligations without additional financial support or alternative sources of income.
The second concern is the level of renter demand in ZIP 21754, which stands at 3.8%. This percentage represents the proportion of renters who qualify for Section 8 housing assistance. While this figure is relatively low, it still suggests a presence of qualified tenants. However, the success of finding and retaining tenants will depend on factors such as the quality of the property and the landlord's reputation. The data does not provide insights into the competition for Section 8 tenants or the overall vacancy rates, which are crucial for understanding the demand landscape fully.
The third objection pertains to whether the Housing Choice Voucher (HCV) program will keep pace with the market rents, which currently stand at $1,745. The HCV program aims to cover a significant portion of the market rent but is subject to funding constraints and policy changes. In ZIP 21754, the FMR of $2,030 provides a benchmark for what the voucher program might aim to cover. However, it's important to note that the actual voucher payment can vary widely and may not always reach the FMR level. Landlords should expect some variability and prepare for the possibility of lower-than-market rent payments from voucher holders.
In summary, while ZIP 21754 presents opportunities for Section 8 investments, it also poses challenges. The FMR does not fully cover the mortgage on a home valued at $694,235, indicating a need for careful financial planning. The 3.8% demand for Section 8 rentals is present but limited, suggesting the importance of competitive property management practices. Lastly, the voucher program may not consistently match the $1,745 market rent, necessitating flexibility in budgeting and expectations.
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.