Location: Louisa County, VA | Metro: Charlottesville, VA MSA
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 | $1,300 |
| 1 Bedroom | $1,450 |
| 2 Bedrooms | $1,650 |
| 3 Bedrooms | $2,000 |
| 4 Bedrooms | $2,460 |
| 5 Bedrooms | $2,854 |
| 6 Bedrooms | $3,196 |
| 7 Bedrooms | $3,452 |
| 8 Bedrooms | $3,625 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $2,000 | $384,343 | 0.52% | F |
| 4BR | $2,460 | $523,315 | 0.47% | F |
U.S. Census Bureau data (2024)
A decision tree for evaluating whether to purchase properties in ZIP code 23084 for Section 8 investment hinges on three critical factors: Fair Market Rent (FMR), market rent comparison, and rental demand.
Step 1: Debt Service Coverage Ratio (DSCR)
The FMR for ZIP 23084 in fiscal year 2024 is set at $1,420. This amount must be sufficient to cover the debt service on a property valued at $389,653. To determine if this is possible, calculate the DSCR using the FMR. If the DSCR is greater than 1, the answer is yes; otherwise, no. For example, if the annual debt service is $17,040 ($1,420 monthly payment), then the DSCR would be 1, indicating that the FMR just clears the debt service. However, if the debt service exceeds this amount, the answer is no.
Step 2: Market Rent Comparison
The next step involves comparing the market rent, which stands at $1,190 according to the Census ACS, to the FMR. If the market rent is below the FMR, then the answer is yes, as there is potential for higher rents under Section 8. If the market rent equals the FMR, it suggests equilibrium, and the decision will depend on other factors. If the market rent exceeds the FMR, the answer is no, as Section 8 might not offer competitive rates.
Step 3: Rental Demand Analysis
Evaluating rental demand requires looking at the percentage of renters and the days on market (DOM). In ZIP 23084, 22.3% of residents are renters, and the DOM is listed as N/A. This lack of data makes it challenging to assess the speed at which properties are rented out. However, the 22.3% figure indicates a moderate level of demand. If the DOM were available and relatively low, say less than 30 days, it would suggest strong demand. In such a case, the answer would be yes. If the DOM were high, the answer would be no. With the current data, the answer is it depends, given the moderate rental rate and the absence of DOM data.
In summary, for ZIP 23084, the decision to invest in Section 8 properties is contingent upon the ability of the FMR to cover debt service, the relationship between market rent and FMR, and the strength of rental demand. The analysis shows that while the FMR meets the debt service requirement, the market rent is below the FMR, suggesting potential. However, without DOM data, the final decision is uncertain, relying heavily on the landlord's tolerance for risk and the overall economic outlook of the area.
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.