Location: Detroit-Warren-Livonia, MI | Metro: Ann Arbor, MI 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 | $1,220 |
| 1 Bedroom | $1,260 |
| 2 Bedrooms | $1,510 |
| 3 Bedrooms | $1,810 |
| 4 Bedrooms | $1,980 |
| 5 Bedrooms | $2,297 |
| 6 Bedrooms | $2,573 |
| 7 Bedrooms | $2,779 |
| 8 Bedrooms | $2,918 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,510 | $193,101 | 0.78% | D |
| 3BR | $1,810 | $221,772 | 0.82% | C |
| 4BR | $1,980 | $348,337 | 0.57% | F |
| 5BR | $2,297 | $494,554 | 0.46% | F |
U.S. Census Bureau data (2024)
The economics of Section 8 in ZIP code 48198, which is located in Ypsilanti, Michigan, within Washtenaw County, are defined by the SAFMR (Small Area Fair Market Rent) for a two-bedroom apartment, set at $1250 for fiscal year 2024. This SAFMR is specifically tailored for this ZIP code, reflecting the local rental market conditions accurately.
In comparison, the local market rent for a similar two-bedroom unit is slightly higher at $1,562 according to the ZORI (Zillow Observed Rent Index). This difference highlights the importance of understanding the SAFMR when considering participation in the Section 8 program.
A landlord's actual reimbursement from a Section 8 voucher involves several components. First, the tenant pays approximately 30% of their adjusted income towards rent. For instance, if the tenant’s income is $1,250 per month, they would contribute $375 toward the rent. However, the actual contribution can vary based on the tenant’s income level.
The voucher then covers the remaining balance up to the SAFMR limit. In this case, the voucher would cover the difference between the tenant’s contribution and the SAFMR, ensuring the landlord receives the full $1250. It is important to note that the voucher does not cover the entire market rent of $1,562, but rather the lower SAFMR.
Beyond the base rent, there are also utility allowances that can be considered part of the overall compensation package. These allowances are designed to help cover the cost of utilities and can vary depending on the size of the unit and the specific needs of the household. For a two-bedroom unit, the allowance might typically range from $100 to $200 per month, further supporting the tenant's living expenses.
To summarize, in ZIP 48198, a landlord participating in the Section 8 program for a two-bedroom apartment will receive $1250 in total rent, which includes the tenant's contribution and the voucher payment. The utility allowances provide additional support but do not increase the total reimbursement above the SAFMR.
This setup creates a reimbursement gap for landlords, as the SAFMR of $1250 is less than the local market rent of $1,562. The gap amounts to $312 per month, meaning landlords accept a lower rent compared to the market rate when leasing to tenants with Section 8 vouchers.
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.