Location: Cleveland, OH | Metro: Cleveland, OH 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 | $860 |
| 1 Bedroom | $980 |
| 2 Bedrooms | $1,190 |
| 3 Bedrooms | $1,520 |
| 4 Bedrooms | $1,640 |
| 5 Bedrooms | $1,902 |
| 6 Bedrooms | $2,130 |
| 7 Bedrooms | $2,300 |
| 8 Bedrooms | $2,415 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,520 | $239,920 | 0.63% | D |
U.S. Census Bureau data (2024)
The analysis for ZIP code 44045 reveals a distinct picture regarding Section 8 cap-rates and market rents. For a two-bedroom unit, the Fair Market Rent (FMR) as determined by HUD for fiscal year 2024 is set at $1,130 annually. This translates into a monthly rental rate of approximately $94.17. In contrast, the Census ACS data indicates that the market rent for a similar unit is $1,037 per year, or roughly $86.42 per month.
Using these figures, we can calculate the implied gross yield for each scenario. When considering the Section 8 rent of $1,130 annually, the gross yield would be approximately 0.51%, derived from dividing the annualized rent by the median home value of $221,891. For the market rent scenario at $1,037 annually, the gross yield drops slightly to around 0.47%.
To provide context, ZIP 44045 has a renter density of 17.1%. This suggests that a significant portion of the housing market consists of owner-occupiers rather than renters. However, it also implies that there is a notable demand for rental properties, particularly those that cater to lower-income households, such as those eligible for Section 8.
The disparity between the Section 8 rent and the market rent reflects the subsidy gap in the area. Landlords participating in the Section 8 program can expect a higher gross yield compared to the general market rent. This makes the Section 8 rent scenario more attractive and potentially more realistic for investors looking to maximize their returns while still serving a valuable segment of the population.
Given the limited data on days on market (DOM), which is listed as N/A, it's challenging to predict how quickly units might be filled under either scenario. However, the higher gross yield associated with Section 8 rents, combined with the stable income stream provided by government subsidies, makes it a preferable option for many landlords and small-portfolio investors in ZIP 44045. The market rent scenario, while closer to the actual cost of living, offers a lower gross yield and may be less appealing without additional incentives or subsidies.
In conclusion, for ZIP 44045, the Section 8 program provides a more favorable gross yield for landlords, offering an annualized rate of 0.51% versus the market rent yield of 0.47%. This difference, although seemingly small, can significantly impact investment decisions and overall portfolio performance.
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.