Location: Caswell County, NC | Metro: Durham-Chapel Hill, NC HUD Metro 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 | $1,280 |
| 1 Bedroom | $1,360 |
| 2 Bedrooms | $1,540 |
| 3 Bedrooms | $1,910 |
| 4 Bedrooms | $2,280 |
| 5 Bedrooms | $2,645 |
| 6 Bedrooms | $2,962 |
| 7 Bedrooms | $3,199 |
| 8 Bedrooms | $3,359 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,910 | $293,206 | 0.65% | D |
U.S. Census Bureau data (2024)
The analysis of the Section 8 cap-rate scenario for ZIP code 27314 reveals two distinct situations based on the available data. The first scenario involves the annualized Fair Market Rent (FMR) for a 2-bedroom unit, which is set at $1670 per month for FY 2024. This translates into an annual rental income of $20,040.
To calculate the implied gross yield under this scenario, we use the median home value of $273,401. The gross yield is calculated by dividing the annual rental income by the median home value. Therefore, the gross yield for a 2BR unit at the FMR would be:
$20,040 / $273,401 = 0.0733 or 7.33%
This gross yield is a theoretical maximum based on the FMR, which does not account for vacancy rates or operating expenses. However, it provides a baseline for comparing against actual market conditions.
The second scenario, which considers the market rent, cannot be quantified due to the lack of specific data. The market rent is noted as N/A, indicating that there isn't enough information to determine a realistic figure for comparison. Without a defined market rent, we cannot calculate a precise gross yield to compare against the FMR scenario.
Given the 6.7% renter density in ZIP 27314, it's important to note that the FMR scenario might overstate the potential profitability for landlords and small-portfolio investors. The low renter density suggests that the demand for rental properties, including those participating in the Section 8 program, could be limited. Additionally, the N/A-day Days on Market (DOM) implies that there is no recent data on how quickly properties are being rented out, which could affect the overall occupancy rate and thus the actual rental income.
In conclusion, while the FMR scenario suggests a gross yield of 7.33%, the reality may differ significantly due to lower-than-average renter density and potentially longer DOM periods. Landlords and investors should consider these factors when evaluating the potential returns of properties in ZIP 27314 under the Section 8 program.
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.