Location: Palm Bay-Melbourne-Titusville, FL | Metro: Palm Bay-Melbourne-Titusville, FL 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 | $1,250 |
| 1 Bedroom | $1,430 |
| 2 Bedrooms | $1,670 |
| 3 Bedrooms | $2,240 |
| 4 Bedrooms | $2,540 |
| 5 Bedrooms | $2,946 |
| 6 Bedrooms | $3,300 |
| 7 Bedrooms | $3,564 |
| 8 Bedrooms | $3,742 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,670 | $162,759 | 1.03% | B |
| 3BR | $2,240 | $259,408 | 0.86% | C |
| 4BR | $2,540 | $359,336 | 0.71% | D |
U.S. Census Bureau data (2024)
A skeptical investor might question whether the Fair Market Rent (FMR) of $1,350 for ZIP code 32905 (Palm Bay, FL) in fiscal year 2024 can adequately cover the mortgage on a home priced at $234,719. This concern stems from the fact that the FMR represents the maximum amount that a landlord can charge for a unit under the Section 8 program. However, the average monthly mortgage payment on a home priced at $234,719 with a 30-year fixed-rate mortgage at 4.5% interest would be around $1,160. Thus, the FMR does provide a buffer over the mortgage payment, allowing for some profit margin and covering other expenses such as maintenance and property taxes.
The investor could also point out that the rental demand at 44.0% might not be sufficient. This percentage indicates the proportion of households that are renters rather than homeowners. While 44.0% may seem low, it's important to consider the overall population and the number of units available for rent. Palm Bay has a growing population, which increases the potential pool of tenants. Moreover, the local economy supports various industries including aerospace, manufacturing, and tourism, providing job opportunities that sustain rental demand.
A final objection might be whether the Housing Choice Voucher Program will keep up with the market rents, currently averaging $1,577. The voucher amounts are adjusted annually based on the area median income and housing costs. Although the FMR of $1,350 is below the market rent, landlords can negotiate additional rent contributions from tenants to make up the difference. Historically, voucher amounts have increased in line with inflation and local cost adjustments, ensuring that they remain viable for both landlords and tenants.
To summarize, while the data raises valid points regarding the FMR, rental demand, and market rent levels, it also suggests that the Section 8 program in ZIP 32905 offers a reasonable return on investment when considering the local economic conditions and potential supplementary rent payments from tenants. Landlords should still perform due diligence on individual properties and tenant profiles to ensure a successful and profitable investment.
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.