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 | $2,480 |
| 1 Bedroom | $2,590 |
| 2 Bedrooms | $2,860 |
| 3 Bedrooms | $3,640 |
| 4 Bedrooms | $4,290 |
| 5 Bedrooms | $4,976 |
| 6 Bedrooms | $5,573 |
| 7 Bedrooms | $6,019 |
| 8 Bedrooms | $6,320 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $3,640 | $624,495 | 0.58% | F |
| 4BR | $4,290 | $878,874 | 0.49% | F |
| 5BR | $4,976 | $974,646 | 0.51% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 22032 reveals some interesting dynamics between government-subsidized rents and market rates. For a two-bedroom property, the Fair Market Rent (FMR) set by the government for FY 2024 is $2580 per month, while the Census ACS reports the market rent at $2,553 per month. Given the median home value in the area is $858,559, we can calculate the implied gross yields for both scenarios.
Starting with the FMR scenario, if a landlord were to lease a property at the government-set rate of $2580 per month, the annual rental income would be $30,960. This translates into an implied gross yield of approximately 3.6% when compared to the median home value. In contrast, the market rent of $2,553 per month results in an annual rental income of $30,636, leading to an implied gross yield of roughly 3.6% as well. The difference in gross yields between the two scenarios is negligible, at just $324 annually.
Given the 13.1% renter density in ZIP 22032, it's important to consider how quickly properties might turn over. With a 5-day Days on Market (DOM), landlords can expect a relatively quick leasing process, which supports the feasibility of achieving either the FMR or market rent. However, the reality of Section 8 participation involves additional considerations such as the administrative burden, potential delays in payment, and the need for regular inspections.
In practice, the market rent scenario might be slightly more favorable due to the direct relationship with the actual market conditions. While the gross yields are nearly identical, the flexibility and potentially fewer bureaucratic hurdles associated with market rent could provide a smoother experience for landlords. Nonetheless, the stability and guaranteed income from Section 8 contracts, despite the lower gross yield, remain attractive to many investors, especially in areas where renter density is relatively low.
To summarize, the gross yields derived from both the FMR and market rent scenarios are almost identical at around 3.6%. This suggests that, from a purely financial standpoint, there is little difference between the two options. However, the decision should also factor in the operational aspects of managing a Section 8 property versus a market-rate rental.
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.