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 | $2,810 |
| 1 Bedroom | $2,930 |
| 2 Bedrooms | $3,240 |
| 3 Bedrooms | $4,130 |
| 4 Bedrooms | $4,860 |
| 5 Bedrooms | $5,638 |
| 6 Bedrooms | $6,315 |
| 7 Bedrooms | $6,820 |
| 8 Bedrooms | $7,161 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $2,930 | $320,743 | 0.91% | C |
| 2BR | $3,240 | $442,958 | 0.73% | D |
| 3BR | $4,130 | $772,007 | 0.53% | F |
| 4BR | $4,860 | $1,243,267 | 0.39% | F |
| 5BR | $5,638 | $1,428,468 | 0.39% | F |
U.S. Census Bureau data (2024)
The Section 8 cap rate scenario for ZIP 22181 (Vienna, VA) can be analyzed using the provided figures. The Fair Market Rent (FMR) for a 2-bedroom apartment is set at $2440 annually for fiscal year 2024. Meanwhile, the market rent, as indicated by the Zillow Observed Rent Index (ZORI), stands at $2,426 per month. To derive the cap rates, we first need to calculate the annualized rental income for both scenarios.
In the case of Section 8, the annualized rental income based on the FMR would be $2440. For the market rent, multiplying the monthly ZORI figure by 12 gives an annualized rental income of $29,112 ($2,426 x 12).
The median home value in ZIP 22181 is $1,126,194. Using this, we can calculate the implied gross yield for both scenarios. For Section 8, the gross yield is calculated as follows:
$2440 / $1,126,194 = 0.2166%, or approximately 0.22%.
For the market rent scenario, the calculation is:
$29,112 / $1,126,194 = 2.5851%, or approximately 2.59%.
The gross yield comparison reveals a stark difference between the two scenarios. The Section 8 gross yield is significantly lower, at just 0.22%, compared to the market rent gross yield of 2.59%. Given the 17.7% renter density and the 9-day days on market (DOM), it is clear that the market rent scenario is more realistic for most investors. The low DOM suggests strong demand, and the higher renter density indicates a robust tenant pool, making the market rent scenario preferable for achieving better returns.
However, for those interested in the stability and predictability of Section 8, the low gross yield must be weighed against the security of guaranteed rent through government subsidies. The decision ultimately depends on the investor's risk tolerance and investment goals.
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.