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 | $1,280 |
| 1 Bedroom | $1,460 |
| 2 Bedrooms | $1,770 |
| 3 Bedrooms | $2,260 |
| 4 Bedrooms | $2,440 |
| 5 Bedrooms | $2,830 |
| 6 Bedrooms | $3,170 |
| 7 Bedrooms | $3,424 |
| 8 Bedrooms | $3,595 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,460 | $125,010 | 1.17% | B |
| 2BR | $1,770 | $225,997 | 0.78% | D |
| 3BR | $2,260 | $373,565 | 0.6% | D |
| 4BR | $2,440 | $566,879 | 0.43% | F |
| 5BR | $2,830 | $776,758 | 0.36% | F |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 44145, located in Westlake, Ohio, reveals two distinct scenarios based on the Fair Market Rent (FMR) and market rent figures. The annualized Fair Market Rent for a 2-bedroom property in this area is set at $1530 for the fiscal year 2024, while the market rent, represented by the Zillow Observed Rental Index (ZORI), stands at $2,122.
To derive the implied gross yield for both scenarios, we start by calculating the annual rental income. For the FMR scenario, the annual rental income would be $1530 multiplied by 12 months, resulting in an annual income of $18,360. Dividing this figure by the median home value of $414,674 gives us an implied gross yield of approximately 4.43%. In contrast, the market rent scenario yields an annual income of $2,122 multiplied by 12, equating to $25,464 annually. This amount divided by the median home value results in an implied gross yield of roughly 6.14%.
Given the 26.9% renter density and a days on market (DOM) of 17 days, the market rent scenario appears more realistic. A lower DOM suggests that properties are rented quickly, indicating a strong demand for rentals in the area. However, the high proportion of homeowners relative to renters means that landlords must consider the competition from owner-occupied homes when setting rents.
The disparity between the FMR and market rent scenarios highlights the potential challenges for landlords participating in the Section 8 program. While the FMR provides a benchmark for subsidized housing, it falls significantly short of the market rent, which reflects the actual demand and willingness to pay among tenants. Consequently, landlords should weigh the benefits of guaranteed rental income against the lower gross yield when deciding whether to participate in the Section 8 program.
In conclusion, the gross yield derived from the FMR is 4.43%, whereas the gross yield from the market rent is 6.14%. Considering the local rental market dynamics, the latter represents a more realistic expectation for landlords and small-portfolio investors in ZIP 44145.
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.