Section 8 Fair Market Rent (FMR) for ZIP 23410 - 2027

FY 2027 Fair Market Rent Rates

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

A decision tree for evaluating whether to purchase properties in ZIP code 23410 for Section 8 investment involves three key questions.

1) Does the Fair Market Rent (FMR) of $1,110 cover the debt service on a property valued at $239,478?

• If yes, proceed to the next question. The FMR must sufficiently cover the mortgage payment, taxes, insurance, and maintenance costs to ensure profitability and sustainability of the investment.
• If no, do not invest. A property valued at $239,478 would likely require a higher rental income to break even or make a profit.

2) How does the market rent of $985 compare to the FMR?

• If market rent is below the FMR, consider investing. This indicates that the property can be rented at the FMR rate without being overpriced compared to the local market, thus attracting Section 8 tenants while still offering competitive rates.
• If market rent is equal to or above the FMR, reconsider your strategy. Equal or higher market rents mean that you might struggle to compete with non-subsidized rentals unless you can leverage other advantages such as location or property condition.

3) Is there sufficient demand with 35.5% of residents being renters and an unspecified number of days as Days on Market (DOM)?

• If the DOM is low and there is a high percentage of renters, then there is likely enough demand. A significant portion of the population renting suggests a need for affordable housing, which aligns well with Section 8 properties.
• If the DOM is high, indicating slow sales or rentals, then the answer is it depends. High DOM could suggest oversupply or other issues affecting demand. Further analysis into why properties are taking longer to sell or rent would be necessary before making a final decision.

In summary, if the FMR covers the debt service, market rent is below the FMR, and there is a substantial rental market with quick turnover, then the answer is yes, you should consider purchasing in ZIP 23410 for Section 8 investment. However, if any of these conditions are not met, particularly a high DOM, the decision becomes more nuanced and requires additional investigation.

Data Sources: FMR data from HUD (2027). 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.