Location: Virginia Beach-Norfolk-Newport News, VA | Metro: Virginia Beach-Norfolk-Newport News, VA-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 | $1,410 |
| 1 Bedroom | $1,430 |
| 2 Bedrooms | $1,600 |
| 3 Bedrooms | $2,210 |
| 4 Bedrooms | $2,600 |
| 5 Bedrooms | $3,016 |
| 6 Bedrooms | $3,378 |
| 7 Bedrooms | $3,648 |
| 8 Bedrooms | $3,830 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,600 | $292,511 | 0.55% | F |
| 3BR | $2,210 | $405,255 | 0.55% | F |
| 4BR | $2,600 | $523,064 | 0.5% | F |
U.S. Census Bureau data (2024)
In evaluating ZIP 27950, Knotts Island, NC, for potential investment in Section 8 properties, several critical questions arise. Let's address them head-on using the available data.
Objection 1: Will FMR $1320 (zip FY 2024) cover the mortgage on a $401,786 home?
The Fair Market Rent (FMR) for ZIP 27950 in fiscal year 2024 is set at $1320. This figure represents the maximum amount that a landlord can charge for a unit under the Section 8 program. To determine if this will cover the mortgage on a $401,786 home, we must consider the prevailing interest rates and loan terms. Assuming a typical 30-year fixed-rate mortgage at an average rate of 5%, the monthly mortgage payment on a $401,786 home would be approximately $2160. Clearly, the FMR of $1320 does not cover the mortgage payment. Therefore, additional income sources or strategies would be necessary to make the investment viable.
Objection 2: Is there enough renter demand at 5.8%?
The rental vacancy rate in ZIP 27950 is 5.8%. This percentage indicates the proportion of vacant rental units relative to the total number of rental units in the area. A lower vacancy rate generally suggests higher demand for rentals. However, the data alone does not provide a complete picture of the demand dynamics. It's important to note that while 5.8% might indicate moderate demand, it also leaves room for improvement in attracting tenants. Landlords should consider factors such as the quality of their properties and the effectiveness of their marketing efforts to ensure they can fill vacancies and maintain occupancy levels.
Objection 3: Will vouchers keep pace with $1,200 market rents?
The FMR for ZIP 27950 is $1320, which is above the market rent of $1200. This means that vouchers issued under the Section 8 program could potentially cover the entire rent for most properties in this area. However, the key concern is whether the voucher amounts will adjust in line with any future increases in market rents. The data does not provide projections for future rent increases or adjustments to voucher amounts. Thus, while current voucher amounts are sufficient, investors should monitor local housing market trends and federal funding updates to anticipate any changes that could impact the balance between voucher values and market rents.
To summarize, while the FMR of $1320 provides a solid base for rental income, it does not cover the mortgage on a $401,786 home. The rental vacancy rate of 5.8% suggests moderate demand but requires careful management. Lastly, current voucher amounts are adequate for the market rent of $1200, but long-term viability depends on how well future adjustments align with market conditions.
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.