Section 8 Fair Market Rent (FMR) for ZIP 98032 - 2027

Investment Score for ZIP 98032

Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)

FY 2027 Fair Market Rent Rates

Unit Size	Monthly FMR
Studio	$1,960
1 Bedroom	$2,040
2 Bedrooms	$2,390
3 Bedrooms	$3,120
4 Bedrooms	$3,710
5 Bedrooms	$4,304
6 Bedrooms	$4,820
7 Bedrooms	$5,206
8 Bedrooms	$5,466

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
1BR	$2,040	$294,900	0.69%	D
2BR	$2,390	$386,396	0.62%	D
3BR	$3,120	$549,063	0.57%	F
4BR	$3,710	$659,294	0.56%	F
5BR	$4,304	$719,085	0.6%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 98032 (Kent, WA) #### Section 8 Voucher Dynamics In ZIP code 98032, the Fair Market Rent (FMR) for a two-bedroom apartment is set at $2,350 per month. This figure represents 34.1% of the median household income of $82,636, indicating that it is a significant portion of what residents can afford. However, the actual rental market is considerably more expensive. The Zillow median price for a two-bedroom home in this area is $386,515, which translates to a monthly mortgage payment of approximately $1,900 based on typical financing terms. When factoring in property taxes, insurance, and maintenance costs, the total cost can easily exceed the FMR of $2,350. The Price-to-FMR ratio of 13.7x suggests that the rental market is highly inflated compared to the FMR. For instance, a two-bedroom unit priced at $386,515 would likely rent for around $1,900 plus additional expenses, totaling about $2,900 per month. This means that even if a landlord charges exactly the FMR, they would still be below the market rate by about $550 per month. Consequently, voucher holders face significant constraints in finding affordable housing, as landlords might prefer higher-paying tenants who do not require vouchers. #### Affordability & Renter Profile ZIP code 98032 has a population of 40,862, with 57.3% of residents being renters. The occupancy rate stands at 93.0%, indicating a relatively tight market where most units are occupied. Given the high proportion of renters and the occupancy rate, there is a strong demand for rental properties. However, the median household income of $82,636 suggests that while many residents are renters, they may struggle to find housing that fits within their budget, especially when considering the high cost of living relative to the FMR. The high renter percentage and occupancy rate imply that the market is competitive, and there is little room for oversupply. With the FMR significantly lower than market rates, it is challenging for voucher holders to find suitable housing, leading to potential displacement and housing insecurity. The affordability gap is stark, with the FMR for a two-bedroom unit representing only 34.1% of the median household income, suggesting that many residents may be spending a disproportionate amount of their income on housing. #### Investor Angle From an investor’s perspective, the ZIP code 98032 presents both opportunities and challenges. The FMR for a two-bedroom unit is $2,350, but the actual market rate is much higher. If an investor were to purchase a two-bedroom home at the Zillow median price of $386,515, the monthly mortgage payment would be approximately $1,900. Adding property taxes, insurance, and maintenance costs, the total monthly expense could reach $2,900, which is still below the FMR of $2,350 when considering the entire cost structure. Given these dynamics, the investment grade for this ZIP code is moderate. While there is a strong demand for rental properties, the high market rates mean that investors may need to consider alternative strategies to ensure profitability. One such strategy could involve purchasing properties at a discount or focusing on units that are slightly below the median price, thereby reducing overall expenses and improving cash flow. #### Specific Actionable Insights 1. **Target Lower-Cost Properties**: Investors should focus on acquiring properties that are priced below the Zillow median. For example, a two-bedroom home priced at $350,000 would have a monthly mortgage payment of approximately $1,750, leaving more room for profit when charging the FMR of $2,350. This approach can help mitigate the risk of negative cash flow. 2. **Consider Smaller Units**: Given the high cost-to-FMR ratio, smaller units like one-bedroom apartments may offer better cash flow opportunities. The FMR for a one-bedroom unit is $2,020, which is closer to the actual market rate for smaller units. This can make it easier for voucher holders to find housing and provide a more stable income stream for investors. 3. **Explore Subsidies and Incentives**: Investors should look into local subsidies and incentives designed to support affordable housing. These programs can help offset some of the costs associated with renting at or below the FMR, making the investment more viable. #### Bottom Line For Section 8-focused investors, the ZIP code 98032 presents a mixed picture. While there is a strong demand for rental properties and a high proportion of renters, the high market rates and low FMRs create significant challenges. The recommendation for this ZIP code is to **Hold** or **Skip**, depending on the investor’s risk tolerance and ability to secure properties at a discount. Investors who can acquire properties below the median price and target smaller units may find the market more favorable, but those who cannot may struggle to achieve positive cash flow. In summary, the high cost-to-FMR ratio and the tight rental market suggest that investing in this ZIP code requires careful consideration and strategic planning to remain profitable while supporting affordable housing initiatives.

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.