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 | $780 |
| 1 Bedroom | $880 |
| 2 Bedrooms | $1,070 |
| 3 Bedrooms | $1,370 |
| 4 Bedrooms | $1,470 |
| 5 Bedrooms | $1,705 |
| 6 Bedrooms | $1,910 |
| 7 Bedrooms | $2,063 |
| 8 Bedrooms | $2,166 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,070 | $70,135 | 1.53% | A+ |
| 3BR | $1,370 | $78,705 | 1.74% | A+ |
| 4BR | $1,470 | $90,597 | 1.62% | A+ |
| 5BR | $1,705 | $96,960 | 1.76% | A+ |
U.S. Census Bureau data (2024)
The Section 8 thesis for real estate investment in ZIP code 44112, which encompasses parts of East Cleveland, Ohio, is built around the discrepancy between the Fair Market Rent (FMR) and the actual market rent. For fiscal year 2024, the FMR stands at $930, while the market rent, as indicated by ZORI (Zillow Observed Rent Index), is $902. This means the FMR is $28 higher than the market rent, representing an increase of approximately 3.1%. In this context, voucher tenants become a strategic asset for landlords and small-portfolio investors.
The higher FMR allows landlords to receive a subsidy that compensates for the difference between the market rate and the FMR, making it a yield play. Given that 54.9% of residents in East Cleveland are renters, there is a substantial demand for affordable housing. The median home value in the area is $86,787, indicating a lower-end market where affordability is crucial. Additionally, the median income of $28,799 suggests that many residents rely on assistance programs like Section 8 to meet their housing needs.
Investors can capitalize on this situation by securing properties with Section 8 tenants, thereby ensuring stable cash flows. The government pays a portion of the rent, which is based on the FMR, effectively guaranteeing a higher rental income than what might be achieved through open-market rates. This subsidy mitigates the risk associated with vacancy and delinquency, common concerns for landlords in areas with significant economic challenges.
However, it's important to note that accepting Section 8 tenants comes with its own set of responsibilities and regulations. Landlords must maintain properties to certain standards and comply with HUD guidelines. Despite these requirements, the financial benefits are clear: a $28 cushion per month above the prevailing market rate, translating into a more predictable and potentially higher return on 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.