Section 8 Fair Market Rent (FMR) for ZIP 98223 - 2027

Investment Score for ZIP 98223

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	$1,890
1 Bedroom	$1,980
2 Bedrooms	$2,310
3 Bedrooms	$3,010
4 Bedrooms	$3,580
5 Bedrooms	$4,153
6 Bedrooms	$4,651
7 Bedrooms	$5,023
8 Bedrooms	$5,274

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
1BR	$1,980	$414,470	0.48%	F
2BR	$2,310	$530,817	0.44%	F
3BR	$3,010	$622,429	0.48%	F
4BR	$3,580	$776,835	0.46%	F
5BR	$4,153	$780,104	0.53%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 98223 (Arlington, WA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for Arlington, WA, as of 2026, is set at $2,260 for a two-bedroom unit. This represents 27.2% of the median household income in the area, which stands at $99,681. However, the actual rental market in Arlington is significantly higher, with the Zillow median price for a two-bedroom unit being $541,100. The price-to-FMR ratio is a staggering 20.0x, indicating that the actual rental prices far exceed the FMR levels. This means that Section 8 voucher holders face significant constraints when trying to find housing in Arlington. With a voucher covering only up to $2,260 per month for a two-bedroom unit, landlords would need to accept a substantial reduction in rent compared to market rates. For example, if a landlord were to rent a two-bedroom unit at the Zillow median price, they would be receiving approximately $4,509 per month ($541,100 divided by 12 months), which is nearly double the FMR level. This makes it challenging for voucher holders to secure housing and for landlords to participate in the Section 8 program without financial strain. #### Affordability & Renter Profile Arlington has a population of 46,497, with 22.4% of residents being renters. The occupancy rate is 92.9%, suggesting a relatively tight rental market. Given the high median household income and the fact that 27.2% of this income is allocated towards a two-bedroom unit, it indicates that the majority of renters in Arlington are likely to be middle-class individuals or families who can afford market-rate rentals. However, the 22.4% renter percentage also implies that there is a segment of the population that cannot afford to purchase homes, particularly those who might rely on government assistance like Section 8 vouchers. These renters are likely to be lower-income households who struggle to find affordable housing options within the city limits. The high price-to-FMR ratio further exacerbates this issue, making it difficult for these households to find suitable accommodation. #### Investor Angle From an investor perspective, Arlington presents a mixed picture. While the rental market is strong, with a high occupancy rate and a large number of residents, the gap between the FMR and actual rental prices poses challenges. An investor looking to operate solely within the FMR guidelines would find it difficult to achieve positive cash flow, especially considering the high property values. To illustrate, let’s consider a two-bedroom unit. If an investor purchases a property at the Zillow median price of $541,100 and rents it out at the FMR of $2,260 per month, their monthly rental income would be $2,260. Assuming a conservative mortgage rate of 4.5% over a 30-year term, the monthly mortgage payment would be around $2,736. This leaves the investor with a negative cash flow of approximately $476 per month, even before accounting for other expenses such as maintenance, insurance, and property taxes. Given these dynamics, Arlington would likely be rated as a low investment grade for Section 8-focused investors. The disparity between FMR and market rates makes it unfeasible to generate positive cash flow while adhering to the program's guidelines. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors should consider focusing on smaller units, such as one-bedroom apartments, where the FMR is $1,940. This is still a significant gap from the market rate but may offer slightly better cash flow opportunities. For instance, a one-bedroom unit purchased at a lower price point could potentially be rented out at FMR levels and still cover the mortgage and other expenses. 2. **Consider Outlying Areas**: Investors might want to explore outlying areas or nearby ZIP codes where the price-to-FMR ratio is lower. This could provide better opportunities for positive cash flow while still catering to the needs of Section 8 voucher holders. For example, ZIP code 98225 (Marysville, WA) might have more affordable housing options that align better with FMR levels. 3. **Develop Relationships with Local Landlords**: Since the actual rental prices are so much higher than the FMR, developing relationships with local landlords who are willing to accept Section 8 vouchers could be beneficial. Landlords who are willing to work within the FMR guidelines might be more inclined to rent to voucher holders, thus providing a steady stream of tenants. #### Bottom Line Based on the provided data, the recommendation for Section 8-focused investors in ZIP code 98223 (Arlington, WA) is to **skip** this market. The high price-to-FMR ratio and the difficulty in achieving positive cash flow make it an unattractive option for those relying on Section 8 vouchers. Instead, investors should look into other areas with more favorable ratios or consider alternative investment strategies that do not strictly adhere to FMR guidelines.

Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). 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.