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 | $1,310 |
| 1 Bedroom | $1,460 |
| 2 Bedrooms | $1,830 |
| 3 Bedrooms | $2,230 |
| 4 Bedrooms | $2,420 |
| 5 Bedrooms | $2,807 |
| 6 Bedrooms | $3,144 |
| 7 Bedrooms | $3,396 |
| 8 Bedrooms | $3,566 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,830 | $218,938 | 0.84% | C |
| 3BR | $2,230 | $291,940 | 0.76% | D |
| 4BR | $2,420 | $249,988 | 0.97% | C |
| 5BR | $2,807 | $216,536 | 1.3% | A |
U.S. Census Bureau data (2024)
ZIP code 48120 is located in the city of Dearborn, Michigan, and represents a densely populated residential area with a total population of 8,323. Over 60.3% of the residents are renters, indicating a strong demand for rental properties in the neighborhood. The median household income stands at $66,066, which suggests that the area is economically stable and the residents have a decent purchasing power. The median home value is $253,780, reflecting the overall property values in the neighborhood.
The Federal Market Rent (FMR) for ZIP 48120 in fiscal year 2024 is set at $1,580, while the average market rent based on Census ACS data is $1,355. This discrepancy between the FMR and the market rent indicates that there is potential for landlords and small-portfolio investors to operate effectively in this area, particularly those who can manage properties with a hands-off approach due to the relatively high FMR coverage. For a hands-on operator looking to add value, the gap between FMR and market rent also presents an opportunity to increase rents beyond the market average, given the economic stability of the area.
In conclusion, ZIP 48120 is suitable for both hands-off voucher operators and hands-on value-add buyers. The high percentage of renters and the economic stability of the neighborhood provide a solid foundation for rental investments. With the FMR exceeding the market rent, voucher operators can secure a reliable income stream, while value-add buyers can leverage the difference to enhance their returns through strategic property management and improvements.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). 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.