Location: Portland-Vancouver-Hillsboro, OR | Metro: Portland-Vancouver-Hillsboro, OR-WA MSA
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 | $1,550 |
| 1 Bedroom | $1,660 |
| 2 Bedrooms | $1,910 |
| 3 Bedrooms | $2,590 |
| 4 Bedrooms | $3,120 |
| 5 Bedrooms | $3,619 |
| 6 Bedrooms | $4,053 |
| 7 Bedrooms | $4,377 |
| 8 Bedrooms | $4,596 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,910 | $496,980 | 0.38% | F |
| 3BR | $2,590 | $678,942 | 0.38% | F |
| 4BR | $3,120 | $894,790 | 0.35% | F |
| 5BR | $3,619 | $1,044,894 | 0.35% | F |
U.S. Census Bureau data (2024)
In ZIP code 97221, located in Portland, OR, investors might question whether the Fair Market Rent (FMR) of $2,080 for the fiscal year 2024 will sufficiently cover the mortgage on a home valued at $769,554. This concern is valid, as the FMR represents the maximum amount that a household earning 80% of the area median income can pay for housing. To accurately assess if this FMR covers the mortgage, we need to consider the interest rates and the term of the mortgage. Assuming a typical 30-year fixed-rate mortgage at an average interest rate, the monthly payment on a $769,554 home would be significantly higher than the FMR. Therefore, the FMR alone is unlikely to cover the mortgage payment without additional income sources.
The skepticism around the renter demand at 28.8% of the population is another critical point. While this percentage indicates a substantial portion of the residents are renters, it does not guarantee sufficient demand for rental properties. The key is understanding how this demand translates into occupancy rates and rental income stability. A 28.8% rental rate suggests a moderate level of competition among landlords. However, the actual demand will depend on factors such as the availability of rental units, the quality of those units, and the overall economic health of the area. The data provided does not give us a complete picture of these dynamics, so while there is a reasonable base of renters, the specific demand for your property type and quality must be considered.
The third objection pertains to the adequacy of voucher programs to keep pace with market rents of $1,616. Voucher holders often face challenges in finding landlords willing to accept their vouchers due to the belief that voucher payments do not match market rents. In ZIP 97221, the gap between the FMR and market rents is significant, with the FMR being $2,080 and market rents averaging $1,616. This difference means that voucher holders may struggle to find suitable accommodation unless they are willing to compromise on location or property quality. For landlords, accepting vouchers could mean a lower rental income compared to market rates, which might not be attractive given the investment value. However, the data does not specify the exact amount of voucher support available or the trend in voucher amounts over time, making it difficult to provide a definitive answer on whether vouchers will keep up with market rents.
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.