Section 8 Fair Market Rent (FMR) for ZIP 98087 - 2027

Investment Score for ZIP 98087

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	$2,130
1 Bedroom	$2,220
2 Bedrooms	$2,600
3 Bedrooms	$3,390
4 Bedrooms	$4,030
5 Bedrooms	$4,675
6 Bedrooms	$5,236
7 Bedrooms	$5,655
8 Bedrooms	$5,938

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	$2,220	$259,228	0.86%	C
2BR	$2,600	$464,800	0.56%	F
3BR	$3,390	$694,783	0.49%	F
4BR	$4,030	$819,089	0.49%	F
5BR	$4,675	$1,004,690	0.47%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 98087 (Lynnwood, WA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 98087 in Lynnwood, WA, is set by HUD for 2026. For a two-bedroom unit, the FMR is $2,520, which represents 28.3% of the median household income of $106,693. However, the actual median rent for a two-bedroom unit on Zillow is $473,312, leading to a price-to-FMR ratio of 15.7x. This means that the actual rent prices are significantly higher than what is considered fair market rent. As a result, Section 8 voucher holders face substantial constraints in finding affordable housing within their budget. The gap between FMR and actual rents suggests that landlords who accept Section 8 vouchers may struggle to compete with market rates, potentially limiting the availability of units for voucher holders. #### Affordability & Renter Profile With 48.0% of the population renting, Lynnwood has a significant rental market. The occupancy rate of 94.6% indicates a tight market where most available units are occupied. Given the median household income of $106,693, the high rent prices suggest that renters in this area are likely to be middle-class families or individuals who can afford the higher costs. However, the disparity between the Zillow median price and the FMR highlights a challenge for lower-income households, making it difficult for them to find affordable housing without assistance like Section 8 vouchers. The tight market conditions mean that there is little room for oversupply, and demand remains strong. #### Investor Angle From an investor perspective, the ZIP code 98087 offers mixed prospects. The FMR for a two-bedroom unit is $2,520, but the actual median rent is $473,312. This implies that if an investor were to purchase a property at the median price, they would not be able to achieve cash flow positivity based solely on the FMR. In fact, the price-to-FMR ratio of 15.7x suggests that the investment would be highly leveraged and unlikely to generate positive cash flow without significant appreciation in property values or a substantial increase in rental income above FMR levels. The investment grade for properties in this ZIP code would be relatively low due to the high purchase prices and the limited ability to raise rents to cover these costs. Investors focusing on Section 8 vouchers would need to carefully consider the financial viability of such investments, given the constraints imposed by the voucher program. #### Specific Actionable Insights 1. **Target Lower-Rent Properties**: Investors should focus on acquiring properties that are priced below the median market value. For instance, targeting a two-bedroom property priced around $300,000 could make it feasible to achieve cash flow positivity when renting at the FMR of $2,520. This would require a purchase price that is approximately 63.4% of the median market value, which could be achieved through negotiating with sellers or identifying undervalued properties. 2. **Consider Smaller Units**: Given the high price-to-FMR ratio, smaller units like one-bedroom apartments might offer better opportunities for cash flow. The FMR for a one-bedroom unit is $2,160, which is still significantly lower than the median market value. Investing in smaller units could help investors stay within the FMR limits while still achieving reasonable returns. 3. **Explore Government Programs**: Investors should explore government programs that provide additional subsidies or incentives for landlords who accept Section 8 vouchers. These programs can help offset some of the financial challenges associated with renting at FMR levels. Additionally, understanding local regulations and zoning laws can help identify areas where rental properties might be more affordable or have less competition. #### Bottom Line Given the high price-to-FMR ratio and the tight rental market, the recommendation for Section 8-focused investors in ZIP code 98087 is to **Skip** purchasing properties at the median market value. Instead, investors should look for opportunities to acquire properties at lower prices or consider smaller units that are more aligned with the FMR. The current market dynamics do not favor positive cash flow for Section 8 investments unless significant discounts can be negotiated or other subsidies are available.

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.