Section 8 Fair Market Rent (FMR) for ZIP 98138 - 2027

FY 2027 Fair Market Rent Rates

The analysis of the Section 8 cap-rate picture for ZIP code 98138 in Unknown, WA, is constrained by the lack of complete data. However, we can still provide some insights based on the available information.

The Fair Market Rent (FMR) for a 2-bedroom apartment in ZIP 98138 for fiscal year 2024 is set at an annualized rate of $2700. This figure represents the maximum amount that a landlord can charge for a Section 8 voucher tenant. Given that the median home value in the area is not available, it's challenging to provide a direct comparison between the FMR and market rents for homes. Nonetheless, we can infer the gross yield for a 2BR apartment using the FMR as a proxy for rental income.

In the scenario where a landlord uses the FMR to determine the rent, the gross yield would be calculated by dividing the annual rent ($2700) by the property value. Since the median home value is not provided, let's assume a hypothetical median home value of $500,000 for illustrative purposes. The gross yield in this case would be 0.54%, which is calculated as follows: $2700 / $500,000 * 100 = 0.54%. This low gross yield is indicative of the limited profitability when relying solely on the FMR for rental income.

However, without the market rent data for ZIP 98138, we cannot accurately compare the gross yields. If the market rent were higher than the FMR, the gross yield would also be higher, potentially making non-Section 8 rentals more attractive. Unfortunately, the market rent is listed as N/A, preventing us from making a definitive comparison.

The lack of detailed data such as renter density and days on market (DOM) further complicates the analysis. These metrics are crucial for understanding the local rental market dynamics and predicting occupancy rates. Without these figures, it's difficult to assess which rental scenario—Section 8 or market—is more realistic.

To conclude, while the Section 8 gross yield based on the FMR of $2700 is 0.54% (using our assumed median home value), the absence of key data points makes it impossible to draw a clear conclusion about the overall attractiveness of Section 8 versus market rentals in ZIP 98138. Landlords and investors should seek out more detailed local market information to make informed decisions.

Data Sources: FMR data from HUD (2027).

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.