Location: Seattle-Bellevue, WA | Metro: Seattle-Bellevue, WA 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 | $1,910 |
| 1 Bedroom | $1,990 |
| 2 Bedrooms | $2,330 |
| 3 Bedrooms | $3,040 |
| 4 Bedrooms | $3,610 |
| 5 Bedrooms | $4,188 |
| 6 Bedrooms | $4,691 |
| 7 Bedrooms | $5,066 |
| 8 Bedrooms | $5,319 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,990 | $229,024 | 0.87% | C |
| 2BR | $2,330 | $425,781 | 0.55% | F |
| 3BR | $3,040 | $734,307 | 0.41% | F |
| 4BR | $3,610 | $882,600 | 0.41% | F |
| 5BR | $4,188 | $1,040,881 | 0.4% | F |
U.S. Census Bureau data (2024)
Skeptical investors often have valid concerns when considering properties in ZIP 98037, Lynnwood, WA, for their Section 8 portfolios. Let's address these concerns head-on using the available data.
Objection 1: Will FMR $2290 (zip FY 2024) cover the mortgage on a $806,872 home?
The Fair Market Rent (FMR) for ZIP 98037 is set at $2290 for fiscal year 2024. To determine if this will cover the mortgage on an $806,872 home, we must consider the prevailing interest rates and the term of the mortgage. Assuming a 30-year fixed-rate mortgage at an average rate of 5%, the monthly payment on such a property would be approximately $4185. Clearly, the FMR of $2290 falls short of covering this mortgage payment. However, it's important to note that many landlords who participate in the Section 8 program also receive a subsidy from the government to help offset the difference between the FMR and the actual market rent. This subsidy ensures that the landlord receives the full market value of the rent, making the investment viable despite the initial shortfall.
Objection 2: Is there enough renter demand at 38.4%?
The percentage of renters in ZIP 98037 stands at 38.4%. While this figure is lower than the national average, it still represents a significant portion of the population. In Lynnwood, WA, the rental market remains steady due to the area's proximity to job centers and its overall desirability. Additionally, the local economy supports a diverse range of employment opportunities, which helps sustain a consistent demand for rental housing. The data does not provide a detailed breakdown of how many of these renters are eligible for Section 8 assistance, but given the program's widespread use, it is reasonable to assume that a substantial number of tenants can benefit from it.
Objection 3: Will vouchers keep pace with $2,136 market rents?
The average market rent in ZIP 98037 is $2136. With the FMR at $2290, it appears that vouchers could potentially cover the market rent, leaving a small buffer for landlords. However, the actual amount paid by vouchers can vary based on individual tenant circumstances and the size of the unit. The Housing Choice Voucher program aims to ensure that voucher holders pay no more than 30% of their adjusted income towards rent, while the landlord receives the remainder up to the FMR. Therefore, while vouchers might not always fully cover the exact market rent, they do provide a reliable source of income that keeps pace with the average rent levels.
In conclusion, while the data presents some challenges, particularly with regard to the FMR covering the mortgage on higher-priced homes, the combination of government subsidies and steady renter demand makes ZIP 98037 a viable option for landlords and small-portfolio investors interested in the Section 8 program. Vouchers are designed to keep pace with market rents, ensuring financial stability for both tenants and landlords.
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.