Location: Olympia-Lacey-Tumwater, WA | Metro: Olympia-Lacey-Tumwater, WA MSA
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 | $1,510 |
| 1 Bedroom | $1,570 |
| 2 Bedrooms | $1,850 |
| 3 Bedrooms | $2,420 |
| 4 Bedrooms | $2,990 |
| 5 Bedrooms | $3,468 |
| 6 Bedrooms | $3,884 |
| 7 Bedrooms | $4,195 |
| 8 Bedrooms | $4,405 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,570 | $343,764 | 0.46% | F |
| 2BR | $1,850 | $403,861 | 0.46% | F |
| 3BR | $2,420 | $469,832 | 0.52% | F |
| 4BR | $2,990 | $556,110 | 0.54% | F |
| 5BR | $3,468 | $589,279 | 0.59% | F |
U.S. Census Bureau data (2024)
If a landlord is considering purchasing a property in ZIP code 98597 (Yelm, WA) for Section 8 investment, they should follow this decision tree:
Step 1: Determine if the Fair Market Rent (FMR) of $1910 can cover the debt service on a property valued at $488,892. To make this assessment, calculate the monthly debt service based on typical mortgage rates and terms. For instance, with a 30-year fixed-rate mortgage at 4.5%, the monthly payment would be approximately $2,467. Since the FMR of $1910 does not exceed the debt service of $2,467, the answer to this question is No. The FMR is insufficient to cover the mortgage payments alone, indicating that Section 8 tenants might not provide adequate income to sustain the property financially.
Step 2: Compare the Zillow Observed Rent Index (ZORI) of $2,451 against the FMR of $1910. Here, the market rent is above the FMR, suggesting that non-Section 8 tenants could potentially pay higher rents. However, since the primary focus is on Section 8 suitability, this comparison alone does not provide a definitive answer but highlights that there is a premium over FMR, which could be significant if the landlord aims to diversify their tenant base.
Step 3: Evaluate the rental demand in Yelm, WA. With 21.8% of residents being renters and an average Days on Market (DOM) of 16 days, the rental market shows strong demand. This means that properties are occupied relatively quickly, reducing vacancy periods and associated losses. However, given that the FMR does not cover the debt service, the strong demand does not sufficiently compensate for the financial shortfall of relying solely on Section 8 tenants.
Conclusion: Based on the provided data, a landlord should not buy in ZIP 98597 (Yelm, WA) if their goal is to exclusively serve Section 8 tenants. The FMR is too low to support the debt service on a property valued at $488,892, making it financially unfeasible. While the rental demand is robust, and market rents exceed the FMR, these factors do not mitigate the core issue of inadequate income from Section 8 tenants. Landlords interested in Yelm, WA, must either seek lower-valued properties or consider a mix of Section 8 and market-rate tenants to ensure financial viability.
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.