Section 8 Fair Market Rent (FMR) for ZIP 24502 - 2027

Investment Score for ZIP 24502

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	$1,200
1 Bedroom	$1,210
2 Bedrooms	$1,390
3 Bedrooms	$1,920
4 Bedrooms	$2,090
5 Bedrooms	$2,424
6 Bedrooms	$2,715
7 Bedrooms	$2,932
8 Bedrooms	$3,079

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
2BR	$1,390	$207,178	0.67%	D
3BR	$1,920	$283,770	0.68%	D
4BR	$2,090	$329,848	0.63%	D
5BR	$2,424	$383,485	0.63%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 24502 (Lynchburg, VA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 24502 is set by HUD to ensure that low-income families can afford housing. For 2026, the FMRs are as follows: - 0BR: $1290 - 1BR: $1300 - 2BR: $1490 (which represents 26.0% of the median household income) - 3BR: $2050 - 4BR: $2200 To understand how these FMRs compare to actual rents, we need to consider the price-to-FMR ratio. Zillow reports a median price for a 2BR home in ZIP 24502 at $205,010. The price-to-FMR ratio for a 2BR unit is 11.5x, indicating that the median home price is significantly higher than the rent FMR. This suggests that landlords who participate in the Section 8 program must adhere to strict rent limits that are much lower than market rates. Given that the FMR for a 2BR unit is $1490, which is only 26.0% of the median household income, it is clear that many residents rely heavily on subsidies to afford housing. However, this also means that landlords might struggle to cover their costs if they depend solely on FMR-based rents. The constraints for voucher holders include finding units that accept Section 8 vouchers and ensuring that the rent does not exceed the FMR. #### Affordability & Renter Profile ZIP code 24502 has a population of 41,979, with 47.7% of households being renters. This indicates a significant rental market presence. The occupancy rate of 88.4% suggests that there is a moderate demand for rental properties, but it is not at the level where every available unit is occupied. With a median household income of $68,872, the majority of residents would find it challenging to afford a 2BR unit priced at $205,010 without financial assistance. The fact that 2BR units cost 11.5 times the FMR further underscores the affordability challenge faced by renters in this area. Given the high percentage of renters and the relatively low median income, the market appears to be tight for affordable housing. There is likely a competitive environment for rental units that fall within the FMR range, making it difficult for low-income families to find suitable housing without assistance. #### Investor Angle From an investor perspective, the ZIP code 24502 presents a mixed picture. The FMR for a 2BR unit is $1490, which is a significant discount compared to the median home price of $205,010. However, the challenge lies in whether the FMR can support a positive cash flow for landlords. Assuming a typical mortgage payment for a 2BR unit at $205,010, with a 20% down payment and a 30-year fixed-rate mortgage at an average interest rate of 4%, the monthly mortgage payment would be approximately $920. Adding property taxes (assuming 1.5% of the home value), insurance, maintenance, and other expenses, the total monthly cost could easily exceed $1490. Therefore, landlords participating in the Section 8 program might face negative cash flow unless they have a low-cost basis for their properties. The investment grade for this ZIP code would be considered low due to the tight rent-to-income ratio and the potential for negative cash flow. Investors should carefully evaluate their cost structures before entering this market. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors should focus on smaller units such as 0BR or 1BR apartments. These units have lower FMRs ($1290 and $1300 respectively) and are less likely to result in negative cash flow. Additionally, smaller units are often more attractive to single individuals or couples who might be looking for affordable housing options. 2. **Consider Cost Basis**: Investors should look for properties with a lower cost basis. For example, purchasing a 2BR unit for under $149,000 would allow for a positive cash flow when renting at the FMR of $1490. This could involve targeting older homes that require renovation or finding distressed properties that can be acquired at a discount. 3. **Diversify Rental Income Sources**: To mitigate the risk of negative cash flow, investors might consider diversifying their rental income sources. This could include offering short-term rentals through platforms like Airbnb during periods when the property is not occupied by a Section 8 tenant, or exploring other government subsidy programs that offer higher rent allowances. #### Bottom Line For Section 8-focused investors, ZIP code 24502 presents a challenging market due to the high price-to-FMR ratio and the tight rent-to-income dynamics. While there is a significant rental market presence, the median home prices far exceed the FMR, making it difficult to achieve positive cash flow. **Recommendation**: Skip investing in this ZIP code for now unless you can acquire properties at a significantly lower cost basis or have a strategy to diversify your income sources. The current market conditions suggest that the risks outweigh the potential returns for most investors focusing solely on Section 8 tenants.

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.