Section 8 Fair Market Rent (FMR) for ZIP 98036 - 2027

Investment Score for ZIP 98036

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	$1,780
1 Bedroom	$1,860
2 Bedrooms	$2,170
3 Bedrooms	$2,830
4 Bedrooms	$3,370
5 Bedrooms	$3,909
6 Bedrooms	$4,378
7 Bedrooms	$4,728
8 Bedrooms	$4,964

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	$1,860	$228,898	0.81%	C
2BR	$2,170	$436,655	0.5%	F
3BR	$2,830	$764,433	0.37%	F
4BR	$3,370	$941,934	0.36%	F
5BR	$3,909	$1,108,127	0.35%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 98036 (Lynnwood, WA) #### Section 8 Voucher Dynamics The Federal Market Rent (FMR) for ZIP code 98036, Lynnwood, WA, is set at $2160 for a two-bedroom unit in 2026. This amount represents 29.1% of the median household income in the area, which stands at $88,958. However, the actual rental market in Lynnwood is significantly higher. The Zillow median price for a two-bedroom unit is $442,503, which translates to a price-to-FMR ratio of 17.1x. This indicates that the actual rents in the market are far above the FMR levels, creating a significant constraint for Section 8 voucher holders. They may struggle to find units that are both affordable and willing to accept their vouchers, given the disparity between FMR and market rents. #### Affordability & Renter Profile With a population of 42,370, Lynnwood has a substantial number of renters, comprising 40.3% of the total population. The occupancy rate is high at 95.4%, suggesting that the rental market is relatively tight. Given the median household income and the fact that 29.1% of it goes towards the FMR for a two-bedroom unit, the affordability of housing is a critical issue for many residents. The high rent-to-income ratio and the tight market conditions imply that there is a strong demand for rental properties, but the supply is limited, especially for those who rely on Section 8 vouchers. The typical renter in this area would likely be middle-class individuals or families who can afford market rates but might struggle to find affordable options. #### Investor Angle From an investor’s perspective, the ZIP code 98036 presents a mixed picture. While the high occupancy rate and strong demand for rentals suggest a robust market, the gap between FMR and actual market rents means that relying solely on Section 8 vouchers for cash flow could be challenging. Investors would need to consider whether they can attract tenants paying market rates or if they can manage properties effectively to accommodate voucher holders while still achieving positive cash flow. The investment grade for this ZIP code would depend heavily on the ability to navigate these challenges and potentially diversify tenant sources. #### Specific Actionable Insights 1. **Focus on Units Below FMR Levels**: Since the actual market rents are much higher than the FMR, investors should look for opportunities to acquire or develop units that are priced closer to the FMR levels. For instance, a two-bedroom unit priced around $2160 per month would be more attractive to Section 8 voucher holders and could ensure a steady stream of income without the risk of vacancy due to high rents. 2. **Consider Mixed-Income Developments**: To balance the tight market and the constraints faced by voucher holders, investors might consider developing mixed-income properties. These developments can include a mix of units that cater to both market-rate tenants and those using Section 8 vouchers. This approach can help stabilize cash flow and provide a broader range of housing options for different income levels. #### Bottom Line Given the high price-to-FMR ratio and the tight rental market, the recommendation for Section 8-focused investors is to **Skip** this ZIP code unless they can secure units below the market rate. The current dynamics make it difficult to achieve positive cash flow purely through Section 8 vouchers, and the high demand for rentals suggests that market-rate tenants are more likely to occupy available units. Therefore, investors should focus on areas where the FMR is closer to the actual market rents or explore alternative strategies such as mixed-income developments to mitigate the risks associated with this ZIP code. --- This analysis provides a comprehensive overview of the rental market dynamics in ZIP code 98036, focusing on the challenges and opportunities for Section 8-focused real estate investments. It highlights the significant gap between FMR and market rents, the high demand for rentals, and the potential difficulties in achieving positive cash flow. The actionable insights offer practical suggestions for navigating these challenges, and the bottom line recommendation is clear and based on the provided data.

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.