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 | $850 |
| 1 Bedroom | $950 |
| 2 Bedrooms | $1,190 |
| 3 Bedrooms | $1,450 |
| 4 Bedrooms | $1,570 |
| 5 Bedrooms | $1,821 |
| 6 Bedrooms | $2,040 |
| 7 Bedrooms | $2,203 |
| 8 Bedrooms | $2,313 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,190 | $140,861 | 0.84% | C |
| 3BR | $1,450 | $183,814 | 0.79% | D |
| 4BR | $1,570 | $236,845 | 0.66% | D |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 48184 in Wayne, Michigan, reveals a significant disparity between the federally mandated Fair Market Rent (FMR) and the actual market rental rates. For a two-bedroom property, the annualized FMR is set at $13,200 ($1,100 per month), while the Zillow Observed Rental Index (ZORI) indicates a market rent of $14,412 ($1,201 per month).
To derive the gross yield, we use the median home value of $172,296 as our base. The gross yield for the FMR scenario is calculated as follows: $13,200 divided by $172,296 equals approximately 7.66%. Conversely, the gross yield based on the ZORI market rent is $14,412 divided by $172,296, equating to roughly 8.37%.
The gross yield comparison between these two figures highlights the financial impact of participating in the Section 8 program versus renting at market rates. A difference of 0.71 percentage points in gross yield can be substantial when considering long-term investment strategies. However, the decision should also take into account the local rental market dynamics and the stability that comes with Section 8 tenancy.
Given the 39.2% renter density in Wayne, Michigan, it is evident that there is a significant portion of the population relying on rental housing. This statistic suggests a steady demand for rental properties, which could support higher market rents. However, the availability of Section 8 vouchers and the preference among some tenants for subsidized housing must also be considered. The N/A-day Days on Market (DOM) figure implies that either rental listings are quickly filled or that data is insufficient to draw a conclusion about the speed of rental turnovers.
In conclusion, while the market rent provides a slightly better gross yield, the decision to participate in the Section 8 program should weigh the benefits of guaranteed income and tenant stability against the potential for higher returns at market rates. Investors must evaluate their risk tolerance and investment goals to determine which option aligns best with their overall strategy.
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.