Section 8 Fair Market Rent (FMR) for ZIP 23602 - 2027

Investment Score for ZIP 23602

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	$1,570
1 Bedroom	$1,590
2 Bedrooms	$1,780
3 Bedrooms	$2,450
4 Bedrooms	$2,890
5 Bedrooms	$3,352
6 Bedrooms	$3,754
7 Bedrooms	$4,054
8 Bedrooms	$4,257

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	$1,780	$218,272	0.82%	C
3BR	$2,450	$301,836	0.81%	C
4BR	$2,890	$394,917	0.73%	D
5BR	$3,352	$473,350	0.71%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 23602 (Newport News, VA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 23602 is set by HUD for 2026. For a two-bedroom unit, the FMR is $1,810, which represents 27.3% of the median household income of $79,475. However, the actual median rent for a two-bedroom unit on Zillow is $214,517, which translates to a monthly mortgage payment of approximately $1,788 based on a 30-year fixed-rate mortgage at 4%. This suggests that the actual rental market price for a two-bedroom unit is slightly below the FMR, but the price-to-FMR ratio of 9.9x indicates that the purchase price of properties is significantly higher than the rent they can command under the Section 8 program. Voucher holders face significant constraints due to the high price-to-FMR ratio. The FMRs are designed to cover a reasonable portion of the rent for various bedroom sizes, but the actual market prices for homes are much higher. This means that voucher holders may struggle to find landlords willing to accept the voucher amount, especially for units with more bedrooms where the gap between FMR and market rent is even larger. #### Affordability & Renter Profile ZIP code 23602 has a population of 42,265, with 46.7% of residents being renters. The occupancy rate stands at 95.6%, indicating a tight rental market with little excess supply. Given the median household income of $79,475, the affordability of housing is a critical issue for many residents. The FMR for a three-bedroom unit is $2,510, which is 31.6% of the median household income, suggesting that families with children might find it challenging to afford adequate housing without assistance. The high percentage of renters and the tight occupancy rate suggest that there is strong demand for rental properties. However, the limited availability of affordable units could make it difficult for low-income households to secure housing, particularly those relying on Section 8 vouchers. #### Investor Angle From an investor perspective, the ZIP code 23602 presents both opportunities and challenges. The FMRs provide a benchmark for what the government will reimburse landlords for accepting Section 8 vouchers. However, the high price-to-FMR ratio implies that purchasing properties in this area would be less favorable for cash flow if the investor relies solely on Section 8 rents. To illustrate, let’s consider a two-bedroom property purchased at the median price of $214,517. Assuming a 20% down payment, the mortgage payment would be around $1,788 per month. The FMR for a two-bedroom unit is $1,810, which is only slightly above the mortgage payment. However, additional costs such as maintenance, insurance, and property taxes must also be considered. These extra expenses could easily push the total cost above the FMR, making the investment less profitable or potentially unprofitable. Given these factors, the investment grade for this ZIP code would be moderate to low for Section 8-focused investors. The high purchase prices relative to the FMRs mean that investors would need to carefully evaluate their financial models to ensure profitability. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Investors should focus on one-bedroom and zero-bedroom units, where the FMRs ($1,600 and $1,580 respectively) are closer to the actual market rents. This would help mitigate the risk of negative cash flow and increase the likelihood of finding tenants who can use their vouchers effectively. 2. **Consider Non-Section 8 Tenants**: Due to the high price-to-FMR ratio, investors might want to explore renting to non-Section 8 tenants who can pay market rates. This could provide better cash flow and potentially higher returns on investment. For instance, a two-bedroom unit priced at the median market rate of $1,788 would be significantly more profitable than one rented at the FMR of $1,810. 3. **Evaluate Location-Specific Factors**: Within ZIP code 23602, certain neighborhoods might offer better opportunities for positive cash flow. Investors should conduct a detailed neighborhood analysis to identify areas where the local rental market is more aligned with the FMRs. This could involve looking at specific streets or blocks where property values are lower, or where there is a higher concentration of voucher holders. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 23602 is to **Skip**. The high price-to-FMR ratio makes it challenging to achieve positive cash flow, and the tight rental market suggests that competition for tenants could be fierce. While there are some opportunities in smaller units, the overall market conditions do not favor investors seeking to rely primarily on Section 8 vouchers for their rental income. Instead, investors might want to look into other ZIP codes with more favorable price-to-FMR ratios or consider diversifying their tenant base to include non-Section 8 renters.

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.