Section 8 Fair Market Rent (FMR) for ZIP 98221 - 2027

Location: San Juan County, WA | Metro: Mount Vernon-Anacortes, WA MSA

Investment Score for ZIP 98221

Monthly Rent (2BR)

$1,940

Median Price (2BR)

$615,571

1% Rule

0.32%

Annual Yield

3.78%

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	$1,350
1 Bedroom	$1,480
2 Bedrooms	$1,940
3 Bedrooms	$2,690
4 Bedrooms	$3,000
5 Bedrooms	$3,480
6 Bedrooms	$3,898
7 Bedrooms	$4,210
8 Bedrooms	$4,421

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	$1,480	$507,774	0.29%	F
2BR	$1,940	$615,571	0.32%	F
3BR	$2,690	$742,978	0.36%	F
4BR	$3,000	$895,826	0.33%	F
5BR	$3,480	$1,016,674	0.34%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

Population

23,562

Median Household Income

$96,528

Housing Units

12,433

Renter Percentage

26.8%

Occupancy Rate

85.4%

Renter Occupied

2,847

To determine if you should invest in ZIP 98221 (Anacortes, WA) for Section 8 properties, follow these steps:

Step 1: Debt Service Coverage Ratio (DSCR)
Does the Fair Market Rent (FMR) of $1750 cover the debt service on a property valued at $720,442?
- Yes: The FMR of $1750 can potentially support a mortgage payment and other expenses on a property costing $720,442. This assumes that the rental income will be sufficient to meet the debt obligations.
- No: The FMR of $1750 is insufficient to cover the debt service on a property valued at $720,442. This would make the investment risky unless you can secure a lower-cost property or find ways to reduce expenses.
Step 2: Market Rent Comparison
Is the Zillow Observed Rent Index (ZORI) of $2,567 above, at, or below the FMR?
- Above: The ZORI of $2,567 exceeds the FMR of $1750, indicating strong market conditions where landlords might consider non-Section 8 tenants for higher rents.
- At: The ZORI matches the FMR, making the ZIP code competitive for both Section 8 and market-rate rentals.
- Below: The ZORI is below the FMR, which could mean Section 8 tenants provide a more stable income compared to the market rate.
Step 3: Demand Analysis
Are the 26.8% of renters combined with a 35-day Days on Market (DOM) indicative of enough demand?
- It Depends: With 26.8% of residents renting, there is a moderate level of demand. A DOM of 35 days suggests that properties are being rented relatively quickly, but this must be balanced against the number of units available and the proportion of those units participating in the Section 8 program. If the participation rate is low, there may still be opportunities. However, if many units are already under Section 8, competition could be high.

Ultimately, the decision to invest in ZIP 98221 for Section 8 properties hinges on whether the FMR can cover your debt service, how the ZORI compares to the FMR, and the overall demand for rental properties. Analyze these factors carefully to ensure the investment aligns with your financial goals and risk tolerance.

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.