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 | $1,850 |
| 1 Bedroom | $1,930 |
| 2 Bedrooms | $2,260 |
| 3 Bedrooms | $2,950 |
| 4 Bedrooms | $3,510 |
| 5 Bedrooms | $4,072 |
| 6 Bedrooms | $4,561 |
| 7 Bedrooms | $4,926 |
| 8 Bedrooms | $5,172 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,930 | $403,657 | 0.48% | F |
| 2BR | $2,260 | $471,898 | 0.48% | F |
| 3BR | $2,950 | $626,780 | 0.47% | F |
| 4BR | $3,510 | $748,850 | 0.47% | F |
| 5BR | $4,072 | $869,063 | 0.47% | F |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 98203 in Everett, WA, reveals some critical insights for landlords and small-portfolio investors. To start, the Fair Market Rent (FMR) for a 2-bedroom unit in ZIP 98203 for fiscal year 2024 is set at $2210 annually. This translates into a monthly rental payment of approximately $184.17 under the Section 8 program. Given the median home value of $648,914 in the area, the implied gross yield for a Section 8 property would be around 3.41%. This is calculated by dividing the annualized rental income ($2210) by the median home value ($648,914).
On the other hand, the Zillow Observed Rental Index (ZORI) indicates that the market rent for a similar 2-bedroom unit is $2,084 per month, or $25,008 annually. Using the same median home value, the implied gross yield based on market rents would be about 3.85%. This calculation provides a direct comparison between the potential returns of a Section 8 property versus a market-rent property.
Given the 32.3% renter density in ZIP 98203, it's clear that there is a significant portion of the population seeking rental housing. However, the 16-day days-on-market (DOM) figure suggests that properties in this area are generally rented quickly, indicating strong demand and potentially allowing landlords to command higher market rents.
In light of these figures, while the Section 8 scenario offers a stable and predictable income stream, the gross yield is lower compared to the market rent scenario. The market rent scenario not only offers a higher gross yield but also aligns better with the current market conditions and demand for rental housing in Everett, WA. Therefore, for most investors looking to maximize returns, the market rent scenario appears to be more realistic and financially beneficial.
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.