Location: Orange County, VA | 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 | $1,430 |
| 1 Bedroom | $1,440 |
| 2 Bedrooms | $1,730 |
| 3 Bedrooms | $2,380 |
| 4 Bedrooms | $2,670 |
| 5 Bedrooms | $3,097 |
| 6 Bedrooms | $3,469 |
| 7 Bedrooms | $3,747 |
| 8 Bedrooms | $3,934 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,730 | $318,465 | 0.54% | F |
| 3BR | $2,380 | $397,717 | 0.6% | F |
| 4BR | $2,670 | $480,740 | 0.56% | F |
| 5BR | $3,097 | $530,294 | 0.58% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP 22508, located in Locust Grove, VA, reveals some interesting insights. To begin, let's annualize the figures provided. The Fair Market Rent (FMR) for a 2-bedroom unit in FY 2024 is $1660 per month, translating to an annual rental income of $19,920. Meanwhile, the Zillow Observed Rent Index (ZORI), representing the market rent, stands at $2,498 per month, or $29,976 annually.
The median home value in ZIP 22508 is $419,920. Using this figure, we can calculate the implied gross yield for both the FMR and market rent scenarios. For the FMR scenario, the gross yield is approximately 4.75%, calculated as $19,920 divided by $419,920. In contrast, the market rent scenario yields a gross yield of about 7.14%, calculated as $29,976 divided by $419,920.
Given the 7.1% renter density and the 29-day Days on Market (DOM), the FMR scenario appears more realistic. The lower renter density suggests that a significant portion of the housing market in ZIP 22508 is occupied by homeowners rather than renters. Additionally, the relatively short DOM indicates that properties are moving quickly once listed, which could be indicative of a competitive rental market where Section 8 rents might not be as attractive to landlords as higher market rents. However, the FMR scenario provides a safer, more predictable income stream for landlords, aligning better with the conservative investment strategy favored by many small-portfolio investors.
In summary, while the market rent scenario offers a higher gross yield of 7.14%, the FMR scenario presents a more realistic outlook with a gross yield of 4.75%. This consideration should help investors make informed decisions when evaluating potential investments in ZIP 22508.
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.