Location: Raleigh-Cary, NC | Metro: Raleigh-Cary, NC MSA
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 | $1,060 |
| 1 Bedroom | $1,080 |
| 2 Bedrooms | $1,220 |
| 3 Bedrooms | $1,500 |
| 4 Bedrooms | $1,980 |
| 5 Bedrooms | $2,297 |
| 6 Bedrooms | $2,573 |
| 7 Bedrooms | $2,779 |
| 8 Bedrooms | $2,918 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,220 | $164,170 | 0.74% | D |
| 3BR | $1,500 | $278,366 | 0.54% | F |
| 4BR | $1,980 | $370,224 | 0.53% | F |
U.S. Census Bureau data (2024)
Selma, NC, located in ZIP code 27576, presents several key considerations for landlords and small-portfolio investors looking to enter the market. The first objection that might arise is whether the Fair Market Rent (FMR) of $1,280 for the fiscal year 2024 will adequately cover the mortgage on a home priced at $273,302. This concern is valid given that the average monthly mortgage payment for a median-priced home in Selma can be estimated at around $1,150 to $1,350, depending on interest rates and loan terms. While the FMR does provide a cushion above the typical mortgage payment, it's important to note that this amount also needs to cover property taxes, insurance, maintenance, and other operational costs.
The second issue is the level of renter demand, which stands at 33.8%. This percentage indicates that roughly one-third of the housing units are rented out. However, the data does not specify if this demand is stable or growing, nor does it reveal the vacancy rate. Without these additional metrics, it's challenging to definitively state whether the demand is sufficient. Nevertheless, a 33.8% rental rate suggests a moderate presence of renters, which could be a positive sign for those considering investment properties.
A final point of contention is the ability of Housing Choice Vouchers to keep up with market rents, which are currently at $1,490. According to the data, the average voucher amount in Selma does not reach this level, raising concerns about the financial viability of accepting vouchers. It's crucial for investors to understand that voucher holders often have the advantage of guaranteed income, but the gap between market rents and voucher amounts must be carefully considered. This discrepancy could mean landlords need to subsidize the difference, or they may struggle to find tenants willing to pay the remaining balance.
To summarize, while the FMR provides a reasonable basis for covering mortgage payments, additional operational costs must be factored into the equation. The 33.8% rental rate suggests a moderate demand, though more detailed information on stability and vacancy rates would be beneficial. Lastly, the disparity between market rents and voucher amounts poses a significant challenge, requiring careful consideration of potential subsidies or tenant selection strategies.
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.