Location: Hammond, LA | Metro: Baton Rouge, 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 | $930 |
| 1 Bedroom | $960 |
| 2 Bedrooms | $1,100 |
| 3 Bedrooms | $1,390 |
| 4 Bedrooms | $1,750 |
| 5 Bedrooms | $2,030 |
| 6 Bedrooms | $2,274 |
| 7 Bedrooms | $2,456 |
| 8 Bedrooms | $2,579 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,390 | $275,333 | 0.5% | F |
| 4BR | $1,750 | $402,038 | 0.44% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 70462 reveals interesting insights for potential landlords and small-portfolio investors. The Fair Market Rent (FMR) for a two-bedroom property in ZIP 70462 for fiscal year 2024 is set at an annualized rate of $13,440 ($1120 per month). Meanwhile, the market rent for a similar property stands at $21,840 annually ($1820 per month).
To calculate the implied gross yield for both scenarios, we use the median home value of $253,320 as our base figure. For the Section 8 scenario, the gross yield is approximately 5.3% ($13,440 / $253,320 * 100), whereas the market rent scenario yields about 8.6% ($21,840 / $253,320 * 100).
The difference between these two gross yields is significant. At 5.3%, the Section 8 scenario offers a lower gross yield compared to the market rent scenario's 8.6%. This gap reflects the trade-off between guaranteed stable income through Section 8 and potentially higher income from market rents.
Given the 7.2% renter density in ZIP 70462, it is important to consider the likelihood of finding tenants willing to pay market rates. Additionally, the lack of available data on Days on Market (DOM) suggests that there might be challenges in quickly renting out properties at market rates, making the Section 8 program a more reliable option for consistent cash flow.
In conclusion, while the market rent scenario presents a higher gross yield, the Section 8 scenario offers a more predictable income stream. Landlords and investors should weigh these factors carefully based on their investment goals and risk tolerance.
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.