Section 8 Fair Market Rent (FMR) for ZIP 98225 - 2027

Investment Score for ZIP 98225

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	$1,530
1 Bedroom	$1,570
2 Bedrooms	$1,920
3 Bedrooms	$2,610
4 Bedrooms	$3,210
5 Bedrooms	$3,724
6 Bedrooms	$4,171
7 Bedrooms	$4,505
8 Bedrooms	$4,730

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	$1,570	$404,968	0.39%	F
2BR	$1,920	$571,383	0.34%	F
3BR	$2,610	$720,533	0.36%	F
4BR	$3,210	$845,056	0.38%	F
5BR	$3,724	$918,769	0.41%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 98225 (Bellingham, WA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) figures for ZIP code 98225 in 2026 indicate that a 2-bedroom unit is priced at $1820 per month. This represents 34.2% of the median household income of $63,941. However, the actual rental market in Bellingham suggests that the median rent for a 2-bedroom unit is significantly higher. According to Zillow, the median price for a 2-bedroom rental property is $572,508, which translates to a monthly rent of approximately $4771 based on typical mortgage calculations. The price-to-FMR ratio of 26.2x indicates that actual rents are far above the FMR, creating significant constraints for voucher holders. For example, a voucher holder would struggle to find a 2-bedroom unit that costs only $1820 when the average rent is nearly three times that amount. #### Affordability & Renter Profile ZIP code 98225 has a high percentage of renters at 59.7%, indicating a strong demand for rental properties. The occupancy rate of 93.4% suggests that the market is relatively tight, with few vacant units available. Given the median household income of $63,941, it is clear that many residents face affordability challenges. A substantial portion of the population likely relies on assistance programs like Section 8 to manage their housing costs. However, the high price-to-FMR ratio implies that even with vouchers, the cost of renting a 2-bedroom unit could be a stretch for many households. This tight market means that landlords have considerable leverage, and rents are likely to remain high unless there is a significant increase in supply. #### Investor Angle From an investor perspective, the ZIP code 98225 presents both opportunities and challenges. The FMR for a 2-bedroom unit is $1820, but the actual median rent is $4771. This discrepancy means that properties rented at FMR levels will likely generate negative cash flow, especially considering the high purchase price of $572,508. To determine if this ZIP code is cash-flow positive at FMR, we need to consider the typical expenses associated with owning a rental property. Assuming a conservative estimate of 50% of the purchase price for financing, with a 4% interest rate, the monthly mortgage payment alone would be around $1908. Adding in other typical expenses such as maintenance, insurance, and property taxes, the total monthly outlay could easily exceed $2500, making it difficult to break even at the FMR of $1820. The investment grade for this ZIP code is moderate to low due to the high purchase prices and the likelihood of negative cash flow. Investors should carefully consider the long-term potential for rental income growth and the stability of the local economy before committing to purchases in this area. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors might want to focus on smaller units, such as 0BR or 1BR, where the FMR is lower ($1480 and $1510 respectively). These units are more likely to be rented at FMR levels without causing significant financial strain. 2. **Consider Alternative Funding Sources**: Since renting at FMR levels is unlikely to cover all expenses, investors should explore alternative funding sources such as grants, tax credits, or partnerships with local affordable housing organizations. These can help offset the initial investment and ongoing costs. 3. **Evaluate Long-Term Trends**: While the current market is tight, investors should look at long-term trends in the local economy and housing market. If there is a growing demand for affordable housing and a stable job market, the investment could become more viable over time. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 98225 is to **Skip**. The high purchase prices and the likelihood of negative cash flow make this a challenging market to enter profitably. Unless investors can secure additional funding or have a long-term strategy that accounts for these factors, they should consider other areas with better alignment between FMR and actual rents.

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.