Section 8 Fair Market Rent (FMR) for ZIP 98258 - 2027

Investment Score for ZIP 98258

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	$2,240
1 Bedroom	$2,330
2 Bedrooms	$2,730
3 Bedrooms	$3,560
4 Bedrooms	$4,230
5 Bedrooms	$4,907
6 Bedrooms	$5,496
7 Bedrooms	$5,936
8 Bedrooms	$6,233

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	$2,330	$517,206	0.45%	F
2BR	$2,730	$530,463	0.51%	F
3BR	$3,560	$643,381	0.55%	F
4BR	$4,230	$776,294	0.54%	F
5BR	$4,907	$865,715	0.57%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 98258 (Lake Stevens, WA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) figures for ZIP code 98258 in 2026 indicate that the rent for a two-bedroom apartment is set at $2,640. This represents 25.6% of the median household income of $123,898, which suggests that it is relatively affordable for those who qualify for Section 8 vouchers. However, the actual rental market in Lake Stevens is significantly higher, with Zillow reporting a median price for a two-bedroom home at $534,823. The price-to-FMR ratio of 16.9x indicates that the actual market rents are much higher than the FMR, creating a significant gap between what voucher holders can afford and what landlords are willing to accept. This gap means that tenants using Section 8 vouchers will likely face challenges finding properties that accept their vouchers and fall within the FMR limits. For example, a landlord would need to accept a rent of $2,640 for a two-bedroom unit, while the market value is nearly $535,000. This discrepancy could lead to fewer landlords being willing to participate in the Section 8 program, especially if they believe they can get a higher rent from non-voucher tenants. #### Affordability & Renter Profile With a population of 52,752 and a renter percentage of 21.5%, Lake Stevens has a relatively small but significant rental market. The occupancy rate of 96.3% suggests that the housing market is quite tight, with very few vacant units available. Given the high median household income of $123,898, the typical renter in Lake Stevens is likely to be a middle-class individual or family who can afford higher rents but may still benefit from the affordability offered by Section 8 vouchers. Despite the high income levels, the 21.5% of renters indicates that there is a segment of the population that relies on rental housing. The median household income also implies that these renters are generally well-off, which could make them attractive to landlords due to their ability to pay higher rents. However, the FMR for a two-bedroom unit at $2,640 is only a fraction of the median income, making it challenging for landlords to cover their costs and still participate in the Section 8 program. #### Investor Angle From an investor perspective, the key question is whether investing in properties that accept Section 8 vouchers is financially viable. The FMR for a two-bedroom unit is $2,640, which is far below the market value of $534,823 reported by Zillow. This means that landlords would need to carefully consider their expenses and potential returns. Given the tight market conditions and the high median household income, there is a strong likelihood that landlords can find non-voucher tenants willing to pay higher rents. However, for those interested in participating in the Section 8 program, the cash flow would need to be analyzed against the property's expenses, including mortgage payments, maintenance, insurance, and other costs. If the expenses exceed the FMR, then the investment would not be cash-flow positive. In terms of investment grade, the high price-to-FMR ratio of 16.9x suggests that the market is overpriced relative to the FMR. This makes it difficult for investors to achieve positive cash flow unless they can manage to keep operating costs extremely low. Additionally, the tight market and high occupancy rate might mean that there is less competition among landlords for tenants, but it also means that the demand for rental properties is high, potentially driving up maintenance and repair costs. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors should focus on smaller units such as one-bedroom apartments. The FMR for a one-bedroom unit is $2,270, which is still significantly lower than the market value but may offer better cash flow opportunities compared to larger units. 2. **Consider Cost Reduction Strategies**: To make Section 8 investments viable, investors must explore ways to reduce costs. This could include purchasing older properties that require minimal renovations, securing financing with lower interest rates, and implementing energy-efficient upgrades to reduce utility bills. 3. **Evaluate Non-Voucher Tenants**: Investors should evaluate the possibility of renting to non-voucher tenants who can pay closer to market rates. With a median household income of $123,898, there is a strong likelihood that many potential tenants can afford higher rents. This could provide a more stable and profitable investment opportunity. #### Bottom Line Based on the provided data, the recommendation for Section 8-focused investors in ZIP code 98258 is to **skip** this market. The high price-to-FMR ratio of 16.9x indicates that the market is overpriced relative to the FMR, making it difficult to achieve positive cash flow. Additionally, the tight market conditions and high occupancy rate suggest that there is little room for error in managing costs. While there are some potential strategies to improve profitability, the overall environment is not favorable for Section 8 investments. Instead, investors might want to look into areas where the price-to-FMR ratio is lower and where there is more flexibility in achieving positive cash flow.

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.