Section 8 Fair Market Rent (FMR) for ZIP 98122 - 2027

Investment Score for ZIP 98122

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	$2,590
1 Bedroom	$2,700
2 Bedrooms	$3,160
3 Bedrooms	$4,120
4 Bedrooms	$4,900
5 Bedrooms	$5,684
6 Bedrooms	$6,366
7 Bedrooms	$6,875
8 Bedrooms	$7,219

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	$2,700	$377,330	0.72%	D
2BR	$3,160	$684,281	0.46%	F
3BR	$4,120	$934,249	0.44%	F
4BR	$4,900	$1,299,593	0.38%	F
5BR	$5,684	$1,550,165	0.37%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 98122 (Seattle, WA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) figures for ZIP code 98122 in Seattle, WA, as of 2026, indicate that the maximum allowable rent for a two-bedroom unit is $3,110. However, this amount represents only 34.9% of the median household income in the area, which stands at $106,886. This suggests that there is a significant gap between what the FMR allows and what the average resident can afford. For instance, a two-bedroom unit priced at $3,110 would be a substantial financial burden for many residents, especially those relying on Section 8 vouchers. The constraints faced by voucher holders are clear: they must find units that do not exceed the FMR but are still affordable and desirable given the high cost of living in Seattle. #### Affordability & Renter Profile ZIP code 98122 has a population of 43,234, with 71.6% of residents being renters. This indicates a strong rental market, where demand significantly outstrips supply. The occupancy rate of 93.2% further supports this notion, suggesting that the vast majority of available housing units are already occupied. Given the Zillow median price for a two-bedroom unit at $696,320, it is evident that the market is extremely tight. The price-to-FMR ratio of 18.7x highlights the stark disparity between the actual market prices and the FMR, making it challenging for low-income renters to find suitable housing. The typical renter in this ZIP code likely faces considerable financial strain, as the median income is relatively high compared to the FMR. This implies that the majority of renters are middle-class individuals who may struggle to find affordable housing options without assistance. Additionally, the high percentage of renters suggests a diverse demographic, including young professionals, families, and students, all competing for limited housing resources. #### Investor Angle From an investor perspective, the ZIP code 98122 presents a mixed scenario. While the FMR provides a benchmark for rental pricing, the actual market conditions suggest that properties rented at FMR levels may not generate sufficient cash flow to cover expenses and provide a reasonable return on investment. For example, a two-bedroom unit renting at $3,110 would be far below the market price of $696,320, indicating that the property might not be generating enough revenue to sustain itself financially. Moreover, the high price-to-FMR ratio of 18.7x means that investors would need to consider the broader market dynamics carefully. Properties rented at FMR levels would likely be undervalued compared to their market worth, which could pose challenges in terms of attracting tenants willing to pay the higher market rates. The investment grade for this ZIP code would be considered moderate to low due to the tight market conditions and the difficulty in finding properties that meet both the FMR criteria and the needs of potential tenants. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors should focus on smaller units such as one-bedroom apartments. The FMR for a one-bedroom unit is $2,670, which is still a fraction of the median income. This makes it more feasible for voucher holders to find affordable housing while also ensuring that the units remain competitive in the rental market. 2. **Consider Renovation Projects**: Investors might want to look into renovation projects in older buildings. By upgrading these properties, they can potentially command higher rents that are closer to the market rate, while still adhering to the FMR guidelines. This strategy can help bridge the gap between the FMR and the actual market value, providing better cash flow and returns. 3. **Develop Long-Term Relationships with Property Managers**: Given the tight market, developing long-term relationships with property managers who understand the local rental dynamics can be beneficial. These managers can help navigate the complexities of renting to voucher holders and ensure that the properties are well-managed and maintained, which is crucial in a highly competitive rental environment. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 98122 is to **Skip**. The extremely high price-to-FMR ratio and the tight rental market make it difficult to achieve positive cash flow and sustainable returns. While there may be opportunities in smaller units or through strategic renovations, the overall market conditions are not favorable for investors looking to rely primarily on Section 8 vouchers. The high costs associated with maintaining and managing properties in this area, combined with the limited financial flexibility of voucher holders, suggest that other ZIP codes with more balanced market dynamics would be preferable for such investments.

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.