Location: Tacoma, WA | Metro: Seattle-Bellevue, WA HUD Metro FMR Area
Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,810 |
| 1 Bedroom | $2,040 |
| 2 Bedrooms | $2,500 |
| 3 Bedrooms | $3,450 |
| 4 Bedrooms | $3,900 |
| 5 Bedrooms | $4,524 |
| 6 Bedrooms | $5,067 |
| 7 Bedrooms | $5,472 |
| 8 Bedrooms | $5,746 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,500 | $510,639 | 0.49% | F |
| 3BR | $3,450 | $606,432 | 0.57% | F |
| 4BR | $3,900 | $775,015 | 0.5% | F |
| 5BR | $4,524 | $881,077 | 0.51% | F |
U.S. Census Bureau data (2024)
Tacoma, WA, represented by ZIP code 98422, presents several key considerations for landlords and small-portfolio investors interested in Section 8 housing. One primary concern is whether the Fair Market Rent (FMR) of $2,510 for the fiscal year 2024 will sufficiently cover the mortgage on a home valued at $676,433. This is a valid objection given that the FMR does not directly correlate to the mortgage payment. However, it's important to note that the FMR is intended to reflect the average rent for a standard two-bedroom apartment, which is generally lower than the cost of owning a home outright. To mitigate risk, investors should consider properties with lower purchase prices or explore rental income from other sources beyond Section 8.
A second objection centers around the level of demand from renters, which stands at 21.9%. While this percentage might seem low, it's crucial to understand that it represents the portion of the population seeking rental assistance. In reality, the demand for affordable housing often exceeds the supply, and Section 8 vouchers can help fill this gap. Additionally, the local rental market dynamics, such as vacancy rates and the availability of other affordable housing options, play a significant role in determining the actual demand. Landlords should also be aware that the 21.9% figure includes both those who qualify and those actively using vouchers, indicating a strong potential for occupancy.
The third objection pertains to whether voucher amounts will keep pace with the market rents, currently set at $2,313. The data shows that the FMR of $2,510 is higher than the market rent, suggesting that voucher holders could potentially afford slightly more expensive units. However, it's essential to recognize that the FMR is an upper limit, and actual voucher payments might be lower. Investors must monitor local housing trends and policy updates to ensure they remain competitive and financially viable. There is no guarantee that voucher amounts will always match market rents, but the current alignment provides a reasonable starting point.
In conclusion, while ZIP 98422 presents some challenges, the data suggests that there are opportunities for landlords and investors. The key lies in understanding the nuances of the local market and being prepared to adapt to changes in policy and demand. It's advisable to conduct thorough due diligence on individual properties and their potential for rental income before making any investment decisions.
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.