Section 8 Fair Market Rent (FMR) for ZIP 23225 - 2027

Investment Score for ZIP 23225

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	$1,440
1 Bedroom	$1,500
2 Bedrooms	$1,630
3 Bedrooms	$2,010
4 Bedrooms	$2,470
5 Bedrooms	$2,865
6 Bedrooms	$3,209
7 Bedrooms	$3,466
8 Bedrooms	$3,639

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
2BR	$1,630	$275,918	0.59%	F
3BR	$2,010	$363,046	0.55%	F
4BR	$2,470	$513,713	0.48%	F
5BR	$2,865	$686,282	0.42%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 23225 (Richmond, VA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 23225 in Richmond, VA, is set by HUD for 2026. For a two-bedroom unit, the FMR is $1650 per month. This represents 31.5% of the median household income of $52,200 annually, which is derived from the median household income of $62,949 and the renter percentage of 52.2%. The FMRs for other bedroom types are as follows: $1440 for a zero-bedroom unit, $1500 for a one-bedroom unit, $2070 for a three-bedroom unit, and $2550 for a four-bedroom unit. Actual rents in the area can be inferred from the Zillow median price for a two-bedroom home, which is $271,558. Assuming a typical rental yield of around 5%, the implied monthly rent would be approximately $2263. This is significantly higher than the FMR of $1650 for a two-bedroom unit, indicating that voucher holders face substantial constraints in finding affordable housing. The gap between FMR and actual rents suggests that many units are priced out of reach for those relying solely on Section 8 vouchers. #### Affordability & Renter Profile ZIP code 23225 has a population of 42,771, with 52.2% of households being renters. This high percentage of renters indicates a strong demand for rental properties. The occupancy rate of 91.2% further supports the notion that the rental market is relatively tight, with few vacant units available. Given the median household income of $62,949, the majority of residents are likely middle-income earners who struggle to afford the high rents in the area. The high price-to-FMR ratio of 13.7x for a two-bedroom unit highlights the significant disparity between property values and the affordability of rents for low-income families. This ratio implies that even if a property owner were to rent out their unit at the FMR, they would still be receiving only a fraction of the potential rental income based on the property’s value. Consequently, the market is challenging for both renters and landlords, especially those who rely on Section 8 vouchers. #### Investor Angle From an investor perspective, the key question is whether renting at the FMR level can generate positive cash flow. To assess this, we need to consider the cost of acquisition and ongoing expenses. With a median property value of $271,558 for a two-bedroom unit, the monthly mortgage payment at a typical interest rate of 5% over 30 years would be approximately $1447. Adding typical operating costs such as property taxes, insurance, maintenance, and utilities, the total monthly expense could easily exceed the FMR of $1650. Given these figures, it appears that renting at the FMR level would likely result in negative cash flow for most investors. However, the investment grade can still be favorable due to the high demand for rental properties and the potential for appreciation in property values over time. Investors should also consider the possibility of renting to non-voucher tenants who can pay closer to the market rate, thus improving cash flow. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors might find better cash flow opportunities by focusing on smaller units like zero-bedroom or one-bedroom apartments. These units have lower FMRs ($1440 and $1500 respectively) but may still attract tenants willing to pay above FMR due to limited supply. 2. **Consider Mixed Tenancy**: To balance the financial impact of Section 8 vouchers, investors could consider a mixed tenancy approach where some units are rented to voucher holders while others are rented to non-voucher tenants. This strategy can help offset the lower rents received from voucher holders with higher rents from other tenants. 3. **Explore Property Value Appreciation**: While renting at FMR levels may not provide immediate positive cash flow, the potential for property value appreciation over time can make this a worthwhile investment. The current median property value of $271,558 for a two-bedroom unit suggests that there is room for growth, particularly if the local economy continues to improve. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 23225 is to **Skip**. The high price-to-FMR ratio and tight rental market make it difficult to achieve positive cash flow when renting exclusively to voucher holders. Instead, investors might want to focus on areas with a lower price-to-FMR ratio or explore alternative investment strategies that include a mix of Section 8 and market-rate tenants. If investing in 23225, it is crucial to factor in the potential for long-term appreciation and the challenges of cash flow management.

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.