Section 8 Fair Market Rent (FMR) for ZIP 98501 - 2027

Investment Score for ZIP 98501

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	$1,570
1 Bedroom	$1,640
2 Bedrooms	$1,930
3 Bedrooms	$2,520
4 Bedrooms	$3,120
5 Bedrooms	$3,619
6 Bedrooms	$4,053
7 Bedrooms	$4,377
8 Bedrooms	$4,596

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	$1,640	$370,892	0.44%	F
2BR	$1,930	$424,714	0.45%	F
3BR	$2,520	$540,007	0.47%	F
4BR	$3,120	$632,462	0.49%	F
5BR	$3,619	$671,833	0.54%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 98501 (Olympia, WA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 98501 in 2026 is set at $1910 for a two-bedroom unit, which represents 23.6% of the median household income of $97,198. This means that the maximum rent allowed under a Section 8 voucher for a two-bedroom home is $1910. However, the Zillow median price for a two-bedroom rental property in this ZIP code is $415,514, leading to a price-to-FMR ratio of 18.1x. This indicates that the actual market rents are significantly higher than the FMR, creating a constraint for voucher holders who may struggle to find suitable housing within their budget. For instance, if a voucher holder can only afford up to $1910 per month, they would have difficulty finding a two-bedroom unit in Olympia, given the high market rents. #### Affordability & Renter Profile ZIP code 98501 has a population of 48,067, with 38.3% being renters. The occupancy rate stands at 95.5%, suggesting a tight rental market where most available units are occupied. Given the median household income of $97,198, the average renter in this area likely earns close to this figure. However, the significant portion of renters (38.3%) indicates a diverse demographic, including those with lower incomes who might rely on assistance programs like Section 8 vouchers. The high occupancy rate and the disparity between FMR and market rents suggest that the market is competitive, and affordable options are limited. This tight market condition makes it challenging for low-income renters to secure housing without substantial financial support. #### Investor Angle From an investor perspective, the ZIP code 98501 presents a mixed picture. While the median household income is relatively high at $97,198, the actual market rents are much higher than the FMR. For example, a two-bedroom unit priced at $415,514 would generate a monthly rent of approximately $1910 based on typical rental yields. However, this amount is still above the FMR limit for Section 8 vouchers. To determine if this ZIP code is cash-flow positive at FMR, we need to consider the cost of acquisition and ongoing expenses such as maintenance, taxes, and insurance. Given the high price-to-FMR ratio, it is unlikely that properties purchased at market rates would be cash-flow positive when rented at FMR levels. Therefore, the investment grade for this ZIP code is moderate to low for Section 8-focused investors due to the limited ability to rent out properties at market rates while staying within FMR guidelines. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Investors should consider focusing on smaller units, such as one-bedroom or studio apartments, which have lower FMRs. For instance, the FMR for a one-bedroom unit is $1640, which is closer to the typical rental yield for properties in this area. This strategy could help maximize the number of units that remain within FMR limits and thus attract Section 8 voucher holders. 2. **Seek Below-Market Properties**: To ensure cash flow positivity, investors should look for properties that are below the median market price. For example, a two-bedroom unit priced at around $250,000 would generate a monthly rent of approximately $1250, which is well below the FMR of $1910. This would allow investors to rent out the property at a rate that is both attractive to voucher holders and profitable. 3. **Consider Renovation Projects**: Investors might also explore opportunities to purchase and renovate older properties that are currently undervalued. By investing in renovations, they can potentially increase the value and rental yield of these properties while keeping them within the FMR range. This approach requires careful consideration of renovation costs and potential rental increases. #### Bottom Line Given the high market rents and the tight rental market conditions in ZIP code 98501, the recommendation for Section 8-focused investors is to **Skip** this ZIP code unless they can identify specific opportunities to acquire properties at significantly below-market prices. The high price-to-FMR ratio and limited availability of affordable units make it challenging to achieve positive cash flow while adhering to FMR guidelines. Therefore, investors should look for other areas with more favorable conditions for Section 8 rentals.

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.