Section 8 Fair Market Rent (FMR) for ZIP 98403 - 2027

Location: Tacoma, WA | Metro: Tacoma, WA HUD Metro FMR Area

Investment Score for ZIP 98403

Monthly Rent (2BR)

$1,780

Median Price (2BR)

$508,862

1% Rule

0.35%

Annual Yield

4.2%

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	$1,290
1 Bedroom	$1,450
2 Bedrooms	$1,780
3 Bedrooms	$2,460
4 Bedrooms	$2,800
5 Bedrooms	$3,248
6 Bedrooms	$3,638
7 Bedrooms	$3,929
8 Bedrooms	$4,125

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
2BR	$1,780	$508,862	0.35%	F
3BR	$2,460	$746,759	0.33%	F
4BR	$2,800	$966,440	0.29%	F
5BR	$3,248	$1,234,941	0.26%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

Population

9,097

Median Household Income

$88,056

Housing Units

5,014

Renter Percentage

60.3%

Occupancy Rate

96.1%

Renter Occupied

2,906

The ZIP code 98403, located in Tacoma, Washington, is a bustling urban neighborhood that offers a mix of residential and commercial properties. It's a prime location for investors interested in the rental market, given its significant renter population and the availability of federal programs like Section 8.

The Fair Market Rent (FMR) for ZIP 98403 in fiscal year 2024 is set at $1,610, indicating the average rent price for a two-bedroom apartment eligible under the Section 8 program.
The market rent, as measured by the Zillow Observed Rent Index (ZORI), stands at $1,560, suggesting that the actual rents charged in the area are slightly below the FMR but still competitive.
The median home value in ZIP 98403 is $702,408, reflecting a robust housing market where property values are relatively high compared to other parts of Tacoma.
Renters make up a substantial portion of the local population, with a renter share of 60.3%, making the rental market a key focus for investment opportunities.
The median income in the area is $88,056, which is above the national average, supporting the potential for higher rental rates and property values.

The analysis points to a strong rental market in ZIP 98403, driven by both federal support through Section 8 and a high concentration of renters. The gap between the ZORI and FMR suggests that there's room for landlords to increase rents while still remaining within the affordable range supported by government programs. However, the median home value indicates that the cost of entry for purchasing properties is relatively high, so investors should consider their capital requirements carefully. Overall, the combination of high median income and a majority renter population makes ZIP 98403 a promising area for those looking to invest in the rental sector, particularly with a focus on affordability and government-assisted housing.

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.