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 | $730 |
| 1 Bedroom | $830 |
| 2 Bedrooms | $1,000 |
| 3 Bedrooms | $1,280 |
| 4 Bedrooms | $1,380 |
| 5 Bedrooms | $1,601 |
| 6 Bedrooms | $1,793 |
| 7 Bedrooms | $1,936 |
| 8 Bedrooms | $2,033 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,000 | $45,611 | 2.19% | A+ |
| 3BR | $1,280 | $52,596 | 2.43% | A+ |
| 4BR | $1,380 | $66,385 | 2.08% | A+ |
U.S. Census Bureau data (2024)
The Section 8 cap rate scenario for ZIP code 44127 in Cleveland, OH, reveals a complex picture when comparing the Federal Market Rent (FMR) and the market rent against the median home value.
Based on the 2BR FMR for fiscal year 2024, the annualized rental income would be $10,800 ($900 x 12 months). Given the median home value of $61,469, this translates into an implied gross yield of approximately 17.6%. The calculation is straightforward: $10,800 / $61,469 = 17.6%.
In contrast, using the market rent figure of $625 per month from the Census ACS, the annualized rental income drops to $7,500 ($625 x 12 months). This results in a significantly lower implied gross yield of about 12.2%, calculated as $7,500 / $61,469 = 12.2%.
The 59.7% renter density suggests that the majority of residents in ZIP 44127 prefer renting over homeownership. However, the N/A-day Days on Market (DOM) indicates incomplete data regarding how long properties typically stay on the market before being rented out. Despite this, the higher gross yield based on FMR is likely more representative for Section 8 properties due to the guaranteed income and low vacancy risk associated with government-subsidized housing programs.
While the market rent scenario offers a more conservative gross yield, it does not account for the stability and predictability of Section 8 payments. Landlords and small-portfolio investors should consider the FMR-based gross yield of 17.6% as a more accurate reflection of potential returns when evaluating Section 8 investments in ZIP 44127. This higher yield aligns with the typical characteristics of Section 8 properties, where the primary advantage lies in the security of rental income rather than in maximizing short-term profits.
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.