Section 8 Fair Market Rent (FMR) for ZIP 98506 - 2027

Location: Olympia-Lacey-Tumwater, WA | Metro: Olympia-Lacey-Tumwater, WA MSA

Investment Score for ZIP 98506

Monthly Rent (2BR)

$1,780

Median Price (2BR)

$440,310

1% Rule

0.4%

Annual Yield

4.85%

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	$1,450
1 Bedroom	$1,520
2 Bedrooms	$1,780
3 Bedrooms	$2,360
4 Bedrooms	$2,960
5 Bedrooms	$3,434
6 Bedrooms	$3,846
7 Bedrooms	$4,154
8 Bedrooms	$4,362

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	$1,520	$448,426	0.34%	F
2BR	$1,780	$440,310	0.4%	F
3BR	$2,360	$552,113	0.43%	F
4BR	$2,960	$646,731	0.46%	F
5BR	$3,434	$693,550	0.5%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

Population

18,497

Median Household Income

$91,596

Housing Units

9,133

Renter Percentage

33.7%

Occupancy Rate

94.3%

Renter Occupied

2,899

To determine if a landlord should invest in ZIP 98506 (Olympia, WA) for Section 8 properties, follow these steps:

Step 1: Does the Fair Market Rent (FMR) of $1630 cover the debt service on a property valued at $542,741?

No: The FMR does not sufficiently cover the debt service for such a high-value property. Landlords should consider properties with lower purchase prices or seek additional sources of income.
Yes: Proceed to Step 2.

Step 2: Is the market rent ($1,705 ZORI) above, at, or below the FMR?

Above: The market rent exceeds the FMR, indicating that landlords might be able to command higher rents outside of Section 8. However, they should still consider the demand for Section 8 units.
At: The market rent aligns with the FMR, which means landlords can expect to receive the FMR as rental income. This scenario requires careful consideration of the demand for Section 8 housing.
Below: The market rent is lower than the FMR, suggesting that landlords could potentially benefit from the higher FMR when renting to Section 8 tenants. However, this must be balanced against the overall demand for rentals.

Step 3: Are the 33.7% renters combined with the unknown days on market (DOM) indicative of sufficient demand?

It depends: With 33.7% of residents being renters, there is a significant portion of the population who rely on rental housing. However, the lack of data on DOM makes it difficult to assess how quickly properties are rented out. Landlords should investigate further into the local rental market trends and availability to make an informed decision.

In conclusion, the decision to buy in ZIP 98506 for Section 8 properties hinges on the ability of the FMR to cover debt service, the relationship between market rent and FMR, and the overall demand for rental housing. Given the available data, landlords should carefully evaluate their financial goals and the specifics of the local rental market before making an investment decision.

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.