Section 8 Fair Market Rent (FMR) for ZIP 23223 - 2027

Investment Score for ZIP 23223

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	$1,370
1 Bedroom	$1,420
2 Bedrooms	$1,550
3 Bedrooms	$1,910
4 Bedrooms	$2,350
5 Bedrooms	$2,726
6 Bedrooms	$3,053
7 Bedrooms	$3,297
8 Bedrooms	$3,462

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
1BR	$1,420	$271,555	0.52%	F
2BR	$1,550	$221,409	0.7%	D
3BR	$1,910	$287,364	0.66%	D
4BR	$2,350	$362,341	0.65%	D
5BR	$2,726	$439,231	0.62%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 23223 (Henrico, VA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 23223 in Henrico, Virginia, is set by HUD for 2026. The FMR for a two-bedroom unit is $1550, which represents 33.4% of the median household income of $55,731. This indicates that the rent is relatively affordable compared to local incomes. However, the actual median rent for a two-bedroom unit on Zillow is $216,019, which translates to a monthly rent of approximately $1800 when considering a typical mortgage payment. Given this, the price-to-FMR ratio is 11.6x, suggesting that actual rents are significantly higher than the FMR. For voucher holders, this means they face substantial constraints. The maximum rent allowed under the Section 8 program for a two-bedroom unit is $1550, while the actual market rent is around $1800. Therefore, voucher holders would need to find units that are priced below the market average, which could be challenging given the high demand and limited supply of affordable housing. #### Affordability & Renter Profile ZIP code 23223 has a population of 54,659, with 56.2% of residents being renters. This high percentage of renters suggests a significant demand for rental properties. The occupancy rate of 92.1% further supports this, indicating that most available units are already occupied, leaving a limited number of vacancies. Given the median household income of $55,731 and the high rent-to-income ratio, it is likely that many residents are struggling to afford housing. The FMR for a three-bedroom unit is $1950, which is still only 35% of the median income, making it a stretch for families to find suitable housing without financial assistance. The tight market conditions mean that there is little room for negotiation on rent prices, and landlords can maintain higher rents due to the scarcity of available units. #### Investor Angle From an investor perspective, the ZIP code 23223 presents both opportunities and challenges. The FMR for a two-bedroom unit is $1550, which is lower than the actual market rent of around $1800. However, the price-to-FMR ratio of 11.6x suggests that the property values are much higher than what the FMR would support. This means that an investor would have to pay a premium for the property but would only be able to charge up to $1550 per month if relying solely on Section 8 vouchers. To determine whether this ZIP code is cash-flow positive at FMR, we must consider the cost of acquisition and ongoing expenses. Assuming a property value of $216,019 for a two-bedroom unit, a conservative estimate for mortgage payments might be around $1800 per month (considering a 30-year fixed-rate mortgage at 4%). Additional costs such as property taxes, insurance, maintenance, and utilities would need to be covered by the $1550 rent. These additional expenses typically range from $300 to $500 per month, depending on the property's condition and location. Thus, an investor would likely incur a loss of $550 to $750 per month, making the ZIP code financially unviable for Section 8-focused investors who rely solely on FMR. In terms of investment grade, ZIP code 23223 would be considered low-grade for Section 8 investments due to the mismatch between FMR and actual market rents. Investors looking to enter this market should carefully evaluate their ability to manage the financial shortfall and consider alternative strategies such as leveraging other sources of income or seeking properties with lower purchase prices. #### Specific Actionable Insights 1. **Target Lower-Rent Properties**: Investors should focus on acquiring properties that are priced closer to the FMR. For example, a two-bedroom unit priced at $1550 or less would be more financially viable under the Section 8 program. This could involve purchasing older or less desirable properties that are more likely to be rented at lower rates. 2. **Consider Mixed-Income Strategies**: To mitigate the risk of financial losses, investors could implement mixed-income strategies where some units are rented to voucher holders and others to market-rate tenants. This approach would help balance the overall income generated from the property. 3. **Explore Alternative Funding Sources**: Given the high price-to-FMR ratio, investors might need to explore alternative funding sources such as government grants, tax credits, or partnerships with non-profit organizations that specialize in affordable housing. These sources could help offset the initial acquisition costs and reduce the financial burden on the investor. #### Bottom Line Based on the analysis, the recommendation for Section 8-focused investors is to **skip** ZIP code 23223. The high price-to-FMR ratio and the tight market conditions make it difficult to achieve positive cash flow using only Section 8 vouchers. While there is a strong demand for rental properties, the financial constraints imposed by the FMR limit the potential profitability for investors in this 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.