Location: Salisbury, MD | Metro: Salisbury, 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 | $1,280 |
| 1 Bedroom | $1,290 |
| 2 Bedrooms | $1,670 |
| 3 Bedrooms | $2,190 |
| 4 Bedrooms | $2,190 |
| 5 Bedrooms | $2,540 |
| 6 Bedrooms | $2,845 |
| 7 Bedrooms | $3,073 |
| 8 Bedrooms | $3,227 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,670 | $187,452 | 0.89% | C |
| 3BR | $2,190 | $257,358 | 0.85% | C |
| 4BR | $2,190 | $350,184 | 0.63% | D |
U.S. Census Bureau data (2024)
The Section 8 thesis in ZIP code 21826, specifically Fruitland, MD, highlights a significant gap between the Fair Market Rent (FMR) and the market rent. For fiscal year 2024, the FMR stands at $1530, while the actual market rent, measured by ZORI, is $1626. This discrepancy amounts to a $96 difference, or approximately 6.27% below the market rate.
Given that the FMR is lower than the market rent, it becomes evident that housing voucher tenants are effectively paying below the open-market rates. This scenario presents a challenge for landlords and small-portfolio investors. While the federal government guarantees payment of the voucher amount, the shortfall can impact overall rental yields and profitability.
In Fruitland, MD, where 34.0% of residents are renters, the median home value is $253,439 and the median income is $64,946. These figures suggest that the local economy might struggle to support higher rents, making the gap between FMR and market rent even more critical. Landlords must carefully consider the financial implications of accepting Section 8 tenants, as the guaranteed income does not fully compensate for the market-rate deficit.
To illustrate the cost of housing voucher tenants below market rates, let's assume a property with five units. At a $96 per unit shortfall, the total annual loss would be $5,760. This calculation underscores the importance of understanding the local economic context and the potential financial impact before engaging in Section 8 leasing.
Moreover, the analysis should include the administrative burden and maintenance costs associated with voucher programs. These factors can further affect the net yield and overall investment performance. Despite these challenges, some investors find Section 8 properties attractive due to the stable, government-backed income stream, which can offer protection against market fluctuations.
In summary, the $96 gap between FMR and market rent in Fruitland, MD, represents a 6.27% discount for voucher tenants. This can result in a noticeable reduction in rental income for landlords and small- portfolio investors. However, the stability provided by the government guarantee can still make these investments appealing in a challenging 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.