Section 8 Fair Market Rent (FMR) for ZIP 23188 - 2027

Investment Score for ZIP 23188

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	$1,560
1 Bedroom	$1,580
2 Bedrooms	$1,770
3 Bedrooms	$2,440
4 Bedrooms	$2,880
5 Bedrooms	$3,341
6 Bedrooms	$3,742
7 Bedrooms	$4,041
8 Bedrooms	$4,243

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	$1,580	$246,491	0.64%	D
2BR	$1,770	$315,912	0.56%	F
3BR	$2,440	$433,665	0.56%	F
4BR	$2,880	$562,819	0.51%	F
5BR	$3,341	$729,945	0.46%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 23188 (Williamsburg, VA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 23188 in Williamsburg, Virginia, is set by HUD for 2026 as follows: - 0BR: $1580 - 1BR: $1600 - 2BR: $1810 (which represents 21.1% of the median household income) - 3BR: $2510 - 4BR: $2960 To understand how these FMRs compare to actual rents, we need to consider the local rental market. The FMR for a 2BR unit is $1810, which is significantly lower than the Zillow median price for a 2BR home, which stands at $310,033. This suggests that the rental market is relatively expensive compared to the FMRs established by HUD. For voucher holders, the constraints are clear: they can only afford units that do not exceed the FMR. In a market where the median price for a 2BR home is $310,033, finding a rental property that fits within the $1810 FMR will be challenging. The high price-to-FMR ratio of 14.3x indicates that the cost of housing far exceeds what is considered fair market rent, making it difficult for voucher holders to find suitable properties. #### Affordability & Renter Profile ZIP code 23188 has a population of 45,803, with 26.6% of residents being renters. The occupancy rate is 92.4%, suggesting a tight rental market with limited availability. Given the median household income of $103,160, the affordability of housing is a significant concern for many residents, particularly those relying on Section 8 vouchers. The median household income is relatively high, but the FMR for a 2BR unit at $1810 is only 21.1% of this income. This means that even without considering the voucher, the average renter would spend a considerable portion of their income on housing. The high price-to-FMR ratio further exacerbates the issue, indicating that the rental market is not aligned with the FMRs set by HUD. Given the high median household income and the tight rental market, the typical renter in this area likely has a higher income level than the national average. However, the disparity between the FMR and the actual rental prices means that low-income households, especially those dependent on Section 8 vouchers, face significant challenges in securing affordable housing. #### Investor Angle From an investor perspective, the key question is whether the ZIP code can generate positive cash flow at the FMR levels. To assess this, we must consider the relationship between the FMR and the actual rental prices. The FMR for a 2BR unit is $1810, while the Zillow median price for a similar unit is $310,033. Assuming a conservative annualized rent-to-price ratio of 5%, the expected annual rental income for a 2BR unit priced at $310,033 would be approximately $15,500 ($310,033 * 5%). This translates to a monthly rental income of about $1292, which is below the FMR of $1810. However, the actual rental prices in the market are likely to be higher than the FMR due to the tight market conditions and the high median household income. If we assume that the actual rental price is closer to the Zillow median price, then the potential rental income would be above the FMR, allowing for positive cash flow. In terms of investment grade, the high median household income and the strong demand for rentals suggest that the area is attractive for investors. However, the challenge lies in finding properties that can be rented out at or below the FMR. Given the high price-to-FMR ratio, it is unlikely that many properties will fit within the FMR guidelines, making it difficult for Section 8-focused investors to find suitable opportunities. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors should focus on smaller units such as 0BR and 1BR apartments. These units have lower FMRs ($1580 and $1600 respectively), which might align better with the actual rental market. For example, a 1BR apartment renting for $1600 could potentially be cash-flow positive if the property expenses are managed effectively. 2. **Consider Off-Market Properties**: Investors should look into off-market properties, such as foreclosures or distressed sales, which might offer better deals. By acquiring properties at a discount, investors can potentially rent them out at or slightly above the FMR, ensuring positive cash flow. 3. **Develop Relationships with Local Landlords**: Building relationships with local landlords who are willing to accept Section 8 vouchers can be beneficial. Some landlords might be more flexible with pricing or willing to negotiate, especially if they have a steady stream of tenants through the voucher program. #### Bottom Line Based on the data provided, the recommendation for Section 8-focused investors in ZIP code 23188 is to **Skip** this market. The high price-to-FMR ratio and the tight rental market make it challenging to find properties that fit within the FMR guidelines. While there is strong demand for rentals, the high median household income and the limited number of units available at or below the FMR suggest that this area is not ideal for investors looking to capitalize on the Section 8 program. Investors seeking opportunities in areas with more favorable FMR-to-rent ratios and a larger pool of Section 8 eligible tenants might find better prospects elsewhere. However, for general real estate investors, the ZIP code remains attractive due to its high median household income and strong rental demand.

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.