Section 8 Fair Market Rent (FMR) for ZIP 98277 - 2027

Investment Score for ZIP 98277

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	$1,300
1 Bedroom	$1,500
2 Bedrooms	$1,870
3 Bedrooms	$2,560
4 Bedrooms	$3,060
5 Bedrooms	$3,550
6 Bedrooms	$3,976
7 Bedrooms	$4,294
8 Bedrooms	$4,509

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	$1,500	$447,102	0.34%	F
2BR	$1,870	$430,395	0.43%	F
3BR	$2,560	$533,698	0.48%	F
4BR	$3,060	$604,490	0.51%	F
5BR	$3,550	$662,878	0.54%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 98277 (Oak Harbor, WA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 98277, as set by HUD for 2026, ranges from $1140 for a zero-bedroom unit to $2650 for a four-bedroom unit. However, the actual rental market in Oak Harbor is significantly higher. For instance, the Zillow median price for a two-bedroom home is $419,054, which translates to a monthly mortgage payment of approximately $2095 based on a typical 4.5% interest rate over a 30-year term. This results in a price-to-FMR ratio of 21.6x, indicating that actual rents are much higher than the FMRs. This means that tenants using Section 8 vouchers face significant constraints in finding suitable housing. The maximum rent they can pay for a two-bedroom unit is $1620, which is far below the actual market rent. As a result, voucher holders must often settle for less desirable properties or smaller units, limiting their housing options. #### Affordability & Renter Profile With a median household income of $83,253, Oak Harbor has a relatively moderate cost of living compared to other urban areas in Washington State. However, the high price-to-FMR ratio suggests that the rental market is quite tight, especially for those relying on Section 8 vouchers. The fact that 40.3% of the population are renters indicates a substantial demand for rental properties. The occupancy rate of 90.3% further supports the notion that the market is tight. This high occupancy rate suggests that there is little excess supply, making it challenging for renters to find affordable housing. Given that 2BR units at FMR represent only 23.4% of the median income, it is clear that many residents struggle to afford housing, particularly those who rely solely on rental assistance programs like Section 8. #### Investor Angle From an investor perspective, the ZIP code 98277 presents both opportunities and challenges. While the median home value is high, the actual rental market is also robust. However, the cash flow potential for investors focusing on Section 8 tenants is limited due to the low FMRs relative to actual rents. For example, a two-bedroom unit rented at FMR would generate $1620 per month, which is significantly lower than the market rent. To assess the investment grade, we need to consider factors such as vacancy rates, property values, and the overall economic stability of the area. With a high occupancy rate and a moderate median income, the area appears stable but not highly lucrative for Section 8-focused investments. The primary constraint is the low FMR cap, which limits rental income for investors. #### 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 or studio apartments. These units have lower FMR caps ($1140 for 0BR and $1310 for 1BR), allowing for better cash flow when rented at FMR. 2. **Consider Mixed-Income Developments**: Investors could explore mixed-income developments where some units are rented at market rates and others are rented to Section 8 voucher holders. This strategy balances the lower FMR rents with higher market rents, potentially improving overall profitability. 3. **Look into Subsidized Housing Programs**: To enhance the attractiveness of Section 8-focused investments, investors might consider applying for additional subsidies or government programs that provide financial incentives for affordable housing projects. This can help offset the lower rental income from FMR-capped units. #### Bottom Line Given the high price-to-FMR ratio and the tight rental market, the recommendation for Section 8-focused investors in ZIP code 98277 is to **Skip** this market unless they can secure additional subsidies or develop mixed-income properties. The current dynamics make it difficult to achieve positive cash flow purely through Section 8 rents, and the limited housing options for voucher holders suggest that there may be fewer tenants willing to accept these terms. In conclusion, while Oak Harbor offers a stable and moderately priced environment, the constraints imposed by the low FMR caps and the high actual rental prices make it less attractive for investors looking to capitalize on Section 8 vouchers alone.

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.