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: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,220 | $179,898 | 0.68% | D |
| 3BR | $1,500 | $285,961 | 0.52% | F |
| 4BR | $1,980 | $390,838 | 0.51% | F |
| 5BR | $2,297 | $420,843 | 0.55% | F |
U.S. Census Bureau data (2024)
The economics of Section 8 housing in ZIP code 27577, which includes Smithfield, NC, and parts of Johnston County, can be quite straightforward when understood properly. For a two-bedroom unit, the SAFMR (Small Area Fair Market Rent) for FY 2024 is set at $1280. This figure is specifically tailored for this ZIP code, meaning it reflects the rental rates unique to this area. In comparison, the local market rent, as indicated by ZORI (Zillow Observed Rent Index), stands at $1682.
A landlord participating in the Section 8 program should know exactly what they will receive in terms of payment. The voucher system operates on a formula where the tenant pays 30% of their adjusted income towards rent, and the remainder is covered by the government up to the SAFMR limit. If a tenant's portion is less than the SAFMR, the difference is made up by the government. However, if the tenant's portion plus the utility allowance exceeds the SAFMR, the landlord receives only the SAFMR amount.
To illustrate, let’s consider a tenant with an adjusted monthly income of $1,000. Thirty percent of this income would be $300, which is the maximum the tenant could pay toward rent. If the total SAFMR for the unit is $1280, the government would cover the remaining $980. Utility allowances vary but typically add about $150-$200 to the tenant's payment, bringing the total reimbursement closer to $1,280.
If the local market rent is higher than the SAFMR, landlords will face a reimbursement gap. In ZIP 27577, given the ZORI of $1682 and the SAFMR of $1280, the reimbursement gap for a two-bedroom unit would be $402 per month. This means landlords would need to either lower their rents to match the SAFMR or find other ways to bridge this financial gap.
In summary, for a two-bedroom unit in ZIP 27577, the typical reimbursement gap under the Section 8 program is $402 per month, based on the current SAFMR and local market rent figures. Landlords must carefully weigh these numbers against their operational costs and investment goals before deciding to participate in 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.