Section 8 Fair Market Rent (FMR) for ZIP 22003 - 2027

Investment Score for ZIP 22003

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	$2,120
1 Bedroom	$2,210
2 Bedrooms	$2,450
3 Bedrooms	$3,120
4 Bedrooms	$3,680
5 Bedrooms	$4,269
6 Bedrooms	$4,781
7 Bedrooms	$5,163
8 Bedrooms	$5,421

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
1BR	$2,210	$216,124	1.02%	B
2BR	$2,450	$259,883	0.94%	C
3BR	$3,120	$621,770	0.5%	F
4BR	$3,680	$870,594	0.42%	F
5BR	$4,269	$970,764	0.44%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 22003 (Annandale, DC) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 22003 in Annandale, DC, is set by HUD for 2026. For a two-bedroom unit, the FMR is $2,250. However, the actual rental market in Annandale is significantly higher. According to Zillow, the median price for a two-bedroom home is $263,416, which translates to a monthly rent of approximately $2,200 if we assume a typical rental yield of 5%. This means that the actual rental market is nearly 9.8 times the FMR, as indicated by the price-to-FMR ratio. Given these figures, Section 8 voucher holders face significant constraints in finding suitable housing. The FMR of $2,250 for a two-bedroom unit is far below the actual market rate, making it challenging for voucher recipients to secure properties within their budget. Landlords may be hesitant to accept vouchers due to the high disparity between FMR and market rates, leading to limited options for renters who rely on Section 8 assistance. #### Affordability & Renter Profile Annandale has a median household income of $138,794, which places it in a relatively affluent category. With 28.7% of residents being renters, the occupancy rate stands at a robust 97.0%, indicating a strong demand for rental units. Given the high median income, many renters can afford market-rate rentals, but this also suggests that those relying on Section 8 vouchers might struggle to find affordable housing. The affordability gap is starkly evident when considering that 19.5% of the median income goes towards a two-bedroom unit's FMR. In reality, the actual cost of renting a two-bedroom unit would likely consume a much larger portion of a renter’s income, making the market quite tight for low-income households. This tightness is further compounded by the fact that the median income is well above the national average, suggesting that there is a significant economic divide between those who can afford market-rate rentals and those who cannot. #### Investor Angle From an investor's perspective, the ZIP code 22003 presents both opportunities and challenges. While the median home price is high, the actual rental market is also robust, with a strong occupancy rate and a high percentage of renters. However, the FMR set by HUD is significantly lower than the actual market rates, which could impact the cash flow for investors who are willing to accept Section 8 vouchers. To determine if the ZIP code is cash-flow positive at FMR, we need to consider the typical rental yields and expenses. Assuming a conservative rental yield of 5%, the monthly rent for a $263,416 property would be around $2,200. If an investor accepts a Section 8 voucher for a two-bedroom unit at $2,250, they would be slightly above the market rate, but still below what most landlords might charge. Expenses such as property taxes, maintenance, and insurance would need to be considered to ensure profitability. Given the high median income and strong demand, the investment grade for this ZIP code is generally favorable. However, the challenge lies in balancing the desire to accept Section 8 vouchers with the need to achieve a positive cash flow. Investors should carefully evaluate their expenses and potential rental income before deciding to enter this market. #### Specific Actionable Insights 1. **Focus on Properties Below Market Rate**: Investors should focus on acquiring properties that are priced below the market rate but still within the range of the FMR. For example, a two-bedroom unit priced at $2,250 per month would be ideal for attracting Section 8 voucher holders while ensuring a positive cash flow. 2. **Consider Multi-Family Units**: Given the higher FMR for three and four-bedroom units ($2,840 and $3,340 respectively), multi-family units could be more attractive for investors. These units often have higher rental yields and can cater to families who might be eligible for larger vouchers. 3. **Engage with Local Housing Authorities**: To navigate the complexities of the Section 8 program, investors should engage with local housing authorities to understand the specific requirements and processes. This can help in securing tenants and ensuring compliance with HUD guidelines. #### Bottom Line For Section 8-focused investors, the ZIP code 22003 presents a mixed picture. On one hand, the strong rental market and high occupancy rates indicate a robust demand for housing. On the other hand, the significant gap between FMR and market rates poses challenges for achieving positive cash flow. **Recommendation**: **Hold**. Investors should hold off on purchasing properties solely based on Section 8 vouchers due to the high disparity between FMR and market rates. Instead, they should consider diversifying their portfolio to include a mix of market-rate and Section 8-friendly units. This approach will balance the risk and reward, ensuring a more stable and profitable investment strategy.

Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.