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 | $1,840 |
| 1 Bedroom | $1,920 |
| 2 Bedrooms | $2,240 |
| 3 Bedrooms | $2,920 |
| 4 Bedrooms | $3,470 |
| 5 Bedrooms | $4,025 |
| 6 Bedrooms | $4,508 |
| 7 Bedrooms | $4,869 |
| 8 Bedrooms | $5,112 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,920 | $290,153 | 0.66% | D |
| 2BR | $2,240 | $443,643 | 0.5% | F |
| 3BR | $2,920 | $602,735 | 0.48% | F |
| 4BR | $3,470 | $749,111 | 0.46% | F |
| 5BR | $4,025 | $860,812 | 0.47% | F |
U.S. Census Bureau data (2024)
The Section 8 thesis in ZIP 98057 revolves around the disparity between the Fair Market Rent (FMR) and the actual market rent. For fiscal year 2024, the FMR is set at $2240, while the Zillow Observed Rent Index (ZORI) indicates a market rent of $2150. This means that the FMR exceeds the market rent by $90, or approximately 4.19%. In the context of Renton, WA, where 74.7% of residents are renters and the median home value stands at $572,679, understanding the implications of this gap is crucial.
The higher FMR compared to the market rent suggests that voucher tenants can provide a yield play for landlords and small-portfolio investors. The federal government covers the difference between the tenant's contribution, which is typically 30% of their income, and the FMR. With a median income of $68,552 in Renton, the tenant's contribution would be roughly $1714 per month. Thus, landlords receive a guaranteed payment of $2240, which is above the prevailing market rate.
This scenario benefits investors because it ensures a steady stream of rental income without the risk associated with finding new tenants who might not pay the full market rent. Additionally, the guaranteed nature of the federal subsidy reduces vacancy risks, providing a stable and predictable cash flow. However, landlords must also consider the administrative costs and potential maintenance issues that come with managing Section 8 properties.
In summary, the $90 gap between FMR and market rent in ZIP 98057 represents an opportunity for landlords and small-portfolio investors to achieve higher yields compared to the open market. This is particularly advantageous given the high percentage of renters and the relatively high median home values in Renton, WA.
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.