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 | $1,560 |
| 1 Bedroom | $1,620 |
| 2 Bedrooms | $1,820 |
| 3 Bedrooms | $2,250 |
| 4 Bedrooms | $2,590 |
| 5 Bedrooms | $3,004 |
| 6 Bedrooms | $3,364 |
| 7 Bedrooms | $3,633 |
| 8 Bedrooms | $3,815 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,820 | $266,356 | 0.68% | D |
| 3BR | $2,250 | $501,055 | 0.45% | F |
| 4BR | $2,590 | $657,936 | 0.39% | F |
| 5BR | $3,004 | $771,413 | 0.39% | F |
U.S. Census Bureau data (2024)
In Carrboro, NC (ZIP 27510), the Section 8 program presents a distinct investment scenario for landlords and small-portfolio investors. Using the Federal Market Rent (FMR) for a 2-bedroom unit at $1660 per month (annualized to $19,920 for FY 2024) and the Zillow Observed Rent Index (ZORI) at $1,484 per month (annualized to $17,808), we can derive the gross yields relative to the median home value of $435,007.
The implied gross yield based on the FMR is approximately 4.58%. This is calculated by taking the annualized FMR of $19,920 and dividing it by the median home value of $435,007. On the other hand, the gross yield based on the ZORI is about 4.09%, derived from the annualized market rent of $17,808 divided by the same median home value.
Given the 72.3% renter density and an average Days on Market (DOM) of 41 days, the FMR scenario appears more realistic. The high renter density suggests a robust demand for rental properties, while the relatively short DOM indicates that properties are quickly occupied once listed. These factors combined imply that maintaining occupancy at the FMR level would be easier compared to the lower ZORI rate.
Investors should consider these gross yields when evaluating the potential returns of a property in ZIP 27510 under the Section 8 program. The higher gross yield from the FMR scenario offers a more favorable outlook, especially considering the strong rental market dynamics. However, it's crucial to note that the actual net operating income (NOI) will depend on various factors such as property management costs, vacancy rates, and maintenance expenses, which investors must account for individually.
To summarize, the gross yield from the FMR at $1660 per month is 4.58%, while the gross yield from the ZORI at $1,484 per month is 4.09%. The higher yield from the FMR aligns better with the local rental market conditions, making it a more practical benchmark for potential investments in Carrboro, 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.