Location: New Orleans-Metairie, LA | Metro: New Orleans-Metairie, LA 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 | $1,640 |
| 1 Bedroom | $1,840 |
| 2 Bedrooms | $2,220 |
| 3 Bedrooms | $2,850 |
| 4 Bedrooms | $3,350 |
| 5 Bedrooms | $3,886 |
| 6 Bedrooms | $4,352 |
| 7 Bedrooms | $4,700 |
| 8 Bedrooms | $4,935 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,840 | $234,377 | 0.79% | D |
| 2BR | $2,220 | $406,960 | 0.55% | F |
| 3BR | $2,850 | $619,335 | 0.46% | F |
| 4BR | $3,350 | $734,656 | 0.46% | F |
| 5BR | $3,886 | $939,738 | 0.41% | F |
U.S. Census Bureau data (2024)
The Section 8 cap rate scenario for ZIP 70130 in New Orleans, LA, reveals some interesting insights for landlords and small-portfolio investors. The Fair Market Rent (FMR) for a two-bedroom property in FY 2024 is set at $2,010 annually, while the market rent, represented by the Zillow Observed Rent Index (ZORI), stands at $1,808 per month.
To derive the gross yield, we first annualize these figures. For the Section 8 FMR, the annual rent would be $2,010 multiplied by 12 months, equating to $24,120. The median home value in ZIP 70130 is $439,853. Thus, the implied gross yield for a Section 8 property is calculated as follows:
$24,120 / $439,853 = 0.0547 or 5.47%
On the other hand, if we consider the market rent of $1,808 per month, the annualized market rent would be $1,808 multiplied by 12, resulting in $21,696. This yields a gross yield of:
$21,696 / $439,853 = 0.0491 or 4.91%
Given that 61.9% of residents in ZIP 70130 are renters, there is a substantial demand for rental properties. Additionally, the Days on Market (DOM) of 84 days suggests that properties are rented out relatively quickly. Considering these factors, the Section 8 gross yield of 5.47% appears more favorable compared to the market rent gross yield of 4.91%. Landlords should weigh the benefits of guaranteed rental income through Section 8 against the potential for higher gross yields from market rents.
The choice between Section 8 and market rent will depend on individual investment strategies and risk tolerance. However, the data clearly indicates that Section 8 offers a slightly better gross yield, making it a potentially attractive option for those seeking stable, long-term rental income.
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.