Location: Walton County, FL | Metro: Crestview-Fort Walton Beach-Destin, 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 | $1,680 |
| 1 Bedroom | $2,020 |
| 2 Bedrooms | $2,260 |
| 3 Bedrooms | $3,100 |
| 4 Bedrooms | $3,770 |
| 5 Bedrooms | $4,373 |
| 6 Bedrooms | $4,898 |
| 7 Bedrooms | $5,290 |
| 8 Bedrooms | $5,555 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $2,020 | $169,396 | 1.19% | B |
| 2BR | $2,260 | $244,640 | 0.92% | C |
| 3BR | $3,100 | $390,489 | 0.79% | D |
| 4BR | $3,770 | $600,483 | 0.63% | D |
| 5BR | $4,373 | $827,580 | 0.53% | F |
U.S. Census Bureau data (2024)
A decision tree for evaluating whether to purchase a property in ZIP code 32578, Florida, for Section 8 investment starts with three key questions. The first question is whether the Fair Market Rent (FMR) of $1,760 for the fiscal year 2024 can cover the debt service on a property valued at $437,571. To determine this, you must calculate the debt service, which includes mortgage payments, property taxes, insurance, and maintenance costs.
If the FMR does not clear the debt service, the answer is a firm No; it would not be financially viable to invest in this area for Section 8 purposes. However, if the FMR of $1,760 does cover these costs, proceed to the second question: Is the market rent, represented by the Zillow Observed Rent Index (ZORI) of $2,018, above, at, or below the FMR?
If the ZORI is significantly above the FMR, the answer is No. Landlords would find it challenging to attract Section 8 tenants due to the higher market rates, making the investment less attractive. Conversely, if the ZORI is at or below the FMR, then the answer is Yes, as this indicates that market conditions are favorable for Section 8 tenancy.
The third question concerns demand: Are the 21.1% of renters combined with a 44-day Days on Market (DOM) sufficient to ensure enough demand for your properties? A DOM of 44 days suggests a moderate time to rent out a property, which is acceptable. The 21.1% rental rate provides context about the overall demand for rentals in the area.
If the DOM is short and the rental rate is high, the answer is a clear Yes. This combination indicates strong demand for rental properties, including those that cater to Section 8 tenants. However, if the DOM is long and the rental rate is low, the answer shifts to No, as the demand is insufficient to support the investment.
In cases where the DOM is moderate but the rental rate is low, the answer becomes It Depends. Additional factors such as local economic conditions, job growth, and population trends need to be considered to make a final decision.
To summarize, for ZIP code 32578, if the FMR of $1,760 clears the debt service on a $437,571 property and the ZORI of $2,018 is at or below the FMR, with a DOM of 44 days and a rental rate of 21.1%, then the investment is likely viable. Otherwise, reconsider the investment based on the specific metrics that do not meet the criteria outlined.
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.