Location: Panama City, FL | Metro: Panama City, FL 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 | $1,420 |
| 1 Bedroom | $1,520 |
| 2 Bedrooms | $1,660 |
| 3 Bedrooms | $2,110 |
| 4 Bedrooms | $2,580 |
| 5 Bedrooms | $2,993 |
| 6 Bedrooms | $3,352 |
| 7 Bedrooms | $3,620 |
| 8 Bedrooms | $3,801 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,660 | $188,115 | 0.88% | C |
| 3BR | $2,110 | $280,490 | 0.75% | D |
| 4BR | $2,580 | $404,744 | 0.64% | D |
| 5BR | $2,993 | $627,368 | 0.48% | F |
U.S. Census Bureau data (2024)
The Section 8 program in ZIP code 32405, which encompasses parts of Panama City, FL, presents a notable financial consideration for landlords and small-portfolio investors. The Fair Market Rent (FMR) for the area as of fiscal year 2024 is set at $1400, whereas the actual market rent, measured by the Zillow Rent Index (ZORI), stands at $1513. This indicates that the FMR is $113 lower than the market rent, representing an 8% discount.
The gap between these figures means that landlords accepting Section 8 vouchers will be renting their properties at a rate that is below the open-market price. This scenario can lead to reduced rental income compared to what could be earned from non-voucher tenants. However, the stability and reliability of voucher payments can offset some of these costs, making it a strategic choice for those seeking steady cash flow over potentially higher rental yields.
In the context of Panama City, where 40.5% of residents are renters and the median home value is $291,312, the median income of $73,373 suggests that many residents rely on assistance programs like Section 8 to afford housing. Given the high proportion of renters and the relatively low median income, the demand for affordable housing is significant, which supports the importance of Section 8 in the local rental market.
For investors, the decision to participate in the Section 8 program must be weighed against the potential loss of income due to the lower rental rates. While the FMR is designed to ensure affordability for tenants, it also sets a ceiling on how much landlords can charge for Section 8 units. Therefore, landlords should consider the long-term benefits of guaranteed rental income against the short-term reduction in rent compared to market rates.
To summarize, the Section 8 program in ZIP 32405 offers a consistent rental income at $1400 per month, which is $113 less than the market rate of $1513. This difference represents an 8% reduction in potential rental income. Despite this, the program remains a vital component of the Panama City rental market, catering to the needs of a substantial portion of the population who are renters with a median income of $73,373.
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.