Location: Detroit-Warren-Livonia, MI | Metro: Detroit-Warren-Livonia, MI 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 | $980 |
| 1 Bedroom | $1,100 |
| 2 Bedrooms | $1,370 |
| 3 Bedrooms | $1,670 |
| 4 Bedrooms | $1,810 |
| 5 Bedrooms | $2,100 |
| 6 Bedrooms | $2,352 |
| 7 Bedrooms | $2,540 |
| 8 Bedrooms | $2,667 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,370 | $239,161 | 0.57% | F |
| 3BR | $1,670 | $327,598 | 0.51% | F |
| 4BR | $1,810 | $343,383 | 0.53% | F |
U.S. Census Bureau data (2024)
A skeptical investor looking at ZIP 48006 (Avoca, MI) might have several concerns regarding the viability of investing in properties that could qualify for Section 8. Let's address these concerns head-on using available data.
Will FMR $1100 (zip FY 2024) cover the mortgage on a $308,143 home?
The Fair Market Rent (FMR) for ZIP 48006 in fiscal year 2024 is set at $1100. This amount needs to be compared against the potential monthly mortgage payment on a home priced at $308,143. Assuming a typical down payment of 20%, the loan amount would be $246,514.40. With an average interest rate of 4.5% over a 30-year term, the monthly mortgage payment would be approximately $1229. This means that the FMR of $1100 will not fully cover the mortgage payment, leaving a shortfall of $129 per month. However, it's important to note that property taxes and insurance can also be factored into the total housing costs, which may be reimbursed under certain circumstances, thus mitigating some of this gap.
Is there enough renter demand at 5.6%?
The rental vacancy rate in ZIP 48006 stands at 5.6%. While this percentage is relatively low, indicating a reasonable level of demand, it does suggest that there could be some competition among landlords for tenants. To put this into perspective, a vacancy rate below 6% is generally considered healthy, but it doesn't guarantee a steady stream of Section 8 tenants. The data does not provide specifics on the number of Section 8 applicants in the area, so we cannot conclusively state the demand for such rentals. It's advisable to research local housing authorities and tenant populations to better gauge this aspect.
Will vouchers keep pace with $1,163 market rents?
The current market rent in ZIP 48006 is $1,163. Given that the FMR is slightly lower at $1100, landlords should be aware that the Housing Choice Voucher program may not always adjust to match market rents immediately. In cases where the FMR is below the market rent, landlords might need to negotiate with the housing authority to ensure that the voucher covers the full rent. Historically, voucher amounts have been adjusted to reflect changes in the market, but this process can take time and may not always align perfectly with immediate market fluctuations.
In summary, while the data shows that the FMR will not fully cover the mortgage on a home priced at $308,143, there are additional factors to consider that could make Section 8 investment viable. The rental vacancy rate indicates a competitive market but does not provide a complete picture of the demand for subsidized housing. Lastly, vouchers are designed to keep pace with market rents, but adjustments may lag behind actual market conditions. Investors should conduct thorough due diligence and consult with local housing authorities to understand the specific dynamics of ZIP 48006.
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.