Section 8 Fair Market Rent (FMR) for ZIP 21804 - 2027

Investment Score for ZIP 21804

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	$1,160
1 Bedroom	$1,170
2 Bedrooms	$1,510
3 Bedrooms	$1,980
4 Bedrooms	$1,990
5 Bedrooms	$2,308
6 Bedrooms	$2,585
7 Bedrooms	$2,792
8 Bedrooms	$2,932

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	$1,170	$115,038	1.02%	B
2BR	$1,510	$175,783	0.86%	C
3BR	$1,980	$257,388	0.77%	D
4BR	$1,990	$327,102	0.61%	D
5BR	$2,308	$424,797	0.54%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 21804 (Salisbury, MD) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for Salisbury, MD (ZIP 21804), as set by HUD for 2026, is $1490 for a two-bedroom unit. This represents approximately 24.4% of the median household income of $73,156 in the area. However, the actual rental market price for a two-bedroom unit, according to Zillow, is significantly higher at $175,421. The price-to-FMR ratio of 9.8x indicates that the actual market rent is nearly ten times the FMR, which poses significant challenges for Section 8 voucher holders. Given that the FMR is considerably lower than the actual market rent, voucher holders face strict limitations on where they can afford to live. They must find landlords willing to accept the voucher amount, which is often below the market rate. This could lead to a concentration of voucher holders in areas with lower rents or in properties where landlords are more flexible with their pricing. #### Affordability & Renter Profile With 48.6% of the population renting, Salisbury has a substantial number of residents who rely on rental housing. The occupancy rate of 92.1% suggests that the rental market is relatively tight, with most units occupied. Given the high percentage of renters and the occupancy rate, it is likely that there is a competitive environment for rental properties. The median household income of $73,156 provides some context for the affordability of housing. While the FMR for a two-bedroom unit is $1490, representing about 24.4% of the median income, the actual market rent of $175,421 is much higher. This implies that many renters, particularly those relying on Section 8 vouchers, may struggle to find affordable housing. The disparity between FMR and market rent also suggests that the rental market is not oversupplied; rather, it is a tight market with limited options for low-income renters. #### Investor Angle From an investor’s perspective, the ZIP code 21804 presents a mixed picture. The actual market rent is significantly higher than the FMR, which means that landlords who accept Section 8 vouchers may face lower cash flows compared to those who can charge market rates. For instance, a landlord accepting the FMR for a two-bedroom unit would receive $1490 per month, whereas the market rent is $175,421, which translates to roughly $1462 per month if amortized over a year. This difference of around $172 per month could be a significant factor in determining whether a property is cash-flow positive. However, the high occupancy rate and the substantial percentage of renters indicate a strong demand for rental housing. Investors who are willing to accept Section 8 vouchers might still find the market attractive due to the steady demand and the potential for long-term tenants. The investment grade for this ZIP code would depend on the ability to find properties at a price point that allows for positive cash flow even when renting at FMR levels. #### Specific Actionable Insights 1. **Focus on Properties Below Market Value**: Investors should look for properties that are priced below the market value but above the FMR. For example, a two-bedroom property priced at $150,000 would offer a monthly rent of about $1250, which is slightly below the FMR but still offers a positive cash flow compared to market rent. This strategy could help investors attract both Section 8 voucher holders and other renters looking for lower-cost options. 2. **Consider Multi-Family Units**: Given the high demand for rental housing, multi-family units could be a better investment. A three-bedroom unit with an FMR of $1970 might be more attractive to families and could potentially command a higher market rent. If an investor can purchase a multi-family property at a reasonable price, they could achieve positive cash flow while serving a broader range of tenants. 3. **Engage with Local Housing Authorities**: Building relationships with local housing authorities can provide insights into the availability of vouchers and the preferences of voucher holders. This could help investors tailor their offerings to meet the needs of these tenants, potentially increasing the likelihood of occupancy and stable cash flow. #### Bottom Line For Section 8-focused investors, the ZIP code 21804 presents a challenging but potentially rewarding market. The significant gap between FMR and market rent means that cash flow will be lower compared to non-voucher properties. However, the strong demand for rental housing and the high occupancy rate suggest that there is a solid base of tenants who need affordable housing. **Recommendation**: **Hold**. Investors should hold onto properties that are already generating positive cash flow at market rates but consider diversifying their portfolio to include properties that can serve Section 8 voucher holders effectively. This approach balances the risk of lower cash flow with the opportunity to serve a growing segment of the rental market.

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.