Location: Durham-Chapel Hill, 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 | $1,290 |
| 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: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,540 | $297,713 | 0.52% | F |
| 3BR | $1,910 | $449,084 | 0.43% | F |
| 4BR | $2,280 | $594,089 | 0.38% | F |
U.S. Census Bureau data (2024)
The analysis for Section 8 properties in ZIP code 27503 reveals a significant gap between the Fair Market Rent (FMR) and the actual market rent. For fiscal year 2024, the FMR is set at $1,490, while the Census ACS data indicates that the market rent stands at $1,607. This means there is a $117 difference, or approximately 8.5%, between what landlords can charge through market rents and what they will receive from Section 8 vouchers.
In the context of Bahama, NC, where only 10.3% of residents are renters and the median home value is $486,531, the lower FMR compared to market rent suggests that landlords accepting Section 8 vouchers will be renting their units below the open-market rate. Given the median income in the area is $114,425, it's evident that the majority of residents can afford higher rents, which further underscores the financial impact of taking on voucher tenants.
The discrepancy between FMR and market rent translates into a direct financial consideration for landlords. While the FMR aims to provide affordable housing options, it falls short of covering the full market rent in ZIP 27503. Landlords must weigh the benefits of guaranteed rental payments against the potential loss of revenue when comparing FMR to market rates. The cost of housing voucher tenants below open-market rates is a critical factor in deciding whether to participate in the Section 8 program.
To illustrate, if a landlord owns a property valued similarly to the median home value in Bahama, NC, they might expect to generate rental income reflective of the local economic conditions. However, accepting a Section 8 voucher tenant would mean receiving $1,490 per month instead of the market rate of $1,607. This reduction in monthly income can affect overall cash flow and investment returns, especially considering the relatively low percentage of renters in the area.
Moreover, the decision to accept Section 8 vouchers should also consider the broader implications for the rental market. In an area where the majority of residents can afford higher rents, landlords who rely on Section 8 may find themselves at a competitive disadvantage. The gap between FMR and market rent highlights the need for landlords to carefully evaluate the financial impact of participating in the Section 8 program versus renting at market rates.
In summary, the gap between FMR and market rent in ZIP 27503 is $117, representing an 8.5% discount off the market rate. This makes it a yield play for landlords willing to accept lower rents for the stability of guaranteed payment, but it also represents a tangible cost for those who might otherwise command higher rents in Bahama, NC.
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.