Location: Wythe County, VA | Metro: Carroll County-Galax city, VA HUD Nonmetro FMR Area
Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)
| Unit Size | Monthly FMR |
|---|---|
| Studio | $810 |
| 1 Bedroom | $850 |
| 2 Bedrooms | $950 |
| 3 Bedrooms | $1,310 |
| 4 Bedrooms | $1,450 |
| 5 Bedrooms | $1,682 |
| 6 Bedrooms | $1,884 |
| 7 Bedrooms | $2,035 |
| 8 Bedrooms | $2,137 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $950 | $142,888 | 0.66% | D |
| 3BR | $1,310 | $187,215 | 0.7% | D |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 24350, located in Ivanhoe, VA, reveals interesting insights when comparing the Federal Market Rent (FMR) for a two-bedroom unit against the median home value of $153,564.
For the first scenario, using the annualized FMR of $920 for a two-bedroom unit (FY 2026, metro), the implied gross yield can be calculated. The gross yield is the annual rental income divided by the property value. In this case, it would be $920 / $153,564 = 0.006, or 0.6%. This yield is quite low and reflects the limited income that a landlord could expect under the Section 8 program.
In the second scenario, where the market rent is not available, we cannot calculate an accurate gross yield. However, the lack of a specific market rent figure suggests that there might be a gap in the data or that market conditions are not well-defined for this area. This uncertainty makes it challenging to compare the yields directly.
Given the 9.4% renter density in Ivanhoe, VA, it is important to consider how many potential tenants might actually be looking for housing assistance through Section 8. A lower renter density implies fewer potential applicants relative to the total population, which could affect the occupancy rate and the overall viability of Section 8 properties in this area.
The Days on Market (DOM) figure being N/A also adds to the complexity. Typically, a higher DOM indicates slower sales, which could suggest that there is less demand for rental properties in general, including those participating in the Section 8 program. Without a specific DOM number, it's difficult to gauge how quickly a property might fill and generate income.
Between the two scenarios, the FMR-based gross yield of 0.6% provides a concrete benchmark. It is significantly lower than typical market yields, indicating that landlords should carefully consider the trade-offs between the security of a government-backed lease and the lower potential returns. While the Section 8 program offers stability, the lower gross yield means that investors must weigh the benefits of guaranteed rent against the opportunity cost of potentially higher yields in other investment strategies.
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.