Section 8 Fair Market Rent (FMR) for ZIP 98198 - 2027

Investment Score for ZIP 98198

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	$1,810
1 Bedroom	$1,890
2 Bedrooms	$2,210
3 Bedrooms	$2,880
4 Bedrooms	$3,430
5 Bedrooms	$3,979
6 Bedrooms	$4,456
7 Bedrooms	$4,812
8 Bedrooms	$5,053

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	$1,890	$276,192	0.68%	D
2BR	$2,210	$421,684	0.52%	F
3BR	$2,880	$581,711	0.5%	F
4BR	$3,430	$690,533	0.5%	F
5BR	$3,979	$777,922	0.51%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

Market Analysis for ZIP Code 98198 (Des Moines, WA) Des Moines, located in King County, is a suburban area with a population of 40,463 residents. The median household income in Des Moines is $86,239, indicating a relatively affluent community. However, 45.2% of the population are renters, which suggests that there is a significant demand for rental housing. The occupancy rate stands at 95.5%, indicating that the rental market is quite tight, with little vacancy available. ### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for 2026 in Des Moines is as follows: - 0BR: $1810 - 1BR: $1870 - 2BR: $2180 (which represents 30.3% of the median income) - 3BR: $2850 - 4BR: $3350 These figures represent the maximum rent that a Section 8 voucher holder can pay for various types of units. However, it is important to note that the actual rents in the market can be significantly higher. For instance, the Zillow median price for a 2BR unit is $419,157, which translates into a monthly rent of approximately $2,095 based on typical mortgage rates and property taxes. This is nearly double the FMR for a 2BR unit, which is $2,180. The price-to-FMR ratio for a 2BR unit is 16.0x, meaning that the market rent is 16 times the FMR. This high ratio indicates that the actual rents are far above the FMR levels set by HUD, creating a significant constraint for voucher holders who must find properties willing to accept these lower rent amounts. It also suggests that landlords might be hesitant to accept Section 8 vouchers due to the limited rent they can charge. ### Affordability & Renter Profile Given the median household income of $86,239, the affordability of housing is a critical issue for many residents. The FMR for a 2BR unit is $2,180, which is 30.3% of the median income. This means that a household earning the median income would spend just over 30% of their income on rent if they were renting a 2BR unit at the FMR level. However, since the actual market rent is much higher, many renters may struggle to find affordable housing. The tight market conditions, with an occupancy rate of 95.5%, indicate that there is a strong demand for rental units. This high demand could lead to upward pressure on rents, making it even more challenging for low-income households to find affordable options. Additionally, the high proportion of renters (45.2%) suggests that there is a diverse mix of individuals and families living in the area, including those who might benefit from Section 8 vouchers. ### Investor Angle From an investor perspective, the key question is whether the ZIP code is cash-flow positive at the FMR levels. To determine this, we need to consider the potential rental income versus the costs associated with owning and managing a rental property. Using the FMR for a 2BR unit ($2,180), let's assume an investor purchases a 2BR unit at the Zillow median price of $419,157. Based on typical financing terms, the monthly mortgage payment for a 2BR unit could be around $2,095, assuming a 30-year fixed-rate mortgage at 5%. This leaves very little room for profit, especially when factoring in additional expenses such as property taxes, insurance, maintenance, and management fees. Given the high price-to-FMR ratio of 16.0x, it is clear that the market rent is well above the FMR. This means that investors who are willing to accept Section 8 vouchers will face a significant reduction in rental income compared to market rates. As a result, the investment grade for properties in Des Moines that rely solely on Section 8 vouchers is likely to be low, unless the investor has a strategy to offset the reduced income through other means, such as government subsidies or tax benefits. ### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors should focus on smaller units like 0BR or 1BR apartments. These units have FMRs of $1,810 and $1,870 respectively, which are closer to the actual market rents for similar-sized units. This can help mitigate some of the financial risks associated with accepting Section 8 vouchers. 2. **Seek Government Subsidies**: Investors should explore additional government subsidies and programs that can provide financial support beyond the FMR. For example, Low-Income Housing Tax Credits (LIHTC) can offer significant tax incentives that make the investment more viable. 3. **Consider Mixed-Income Developments**: Developing mixed-income housing projects where a portion of the units are reserved for Section 8 voucher holders and the rest are rented at market rates can balance out the financial impact. This approach allows investors to generate higher overall revenue while still providing affordable housing options. ### Bottom Line For Section 8-focused investors, the recommendation for ZIP 98198 (Des Moines, WA) is to **Skip** this market. The high price-to-FMR ratio and tight rental market conditions make it difficult to achieve positive cash flow without additional subsidies or creative development strategies. While there is a significant demand for rental housing, the financial constraints imposed by the FMR levels make it less attractive for investors who are solely relying on Section 8 vouchers.

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.