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 | $1,170 |
| 1 Bedroom | $1,300 |
| 2 Bedrooms | $1,630 |
| 3 Bedrooms | $1,980 |
| 4 Bedrooms | $2,150 |
| 5 Bedrooms | $2,494 |
| 6 Bedrooms | $2,793 |
| 7 Bedrooms | $3,016 |
| 8 Bedrooms | $3,167 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,300 | $182,067 | 0.71% | D |
| 2BR | $1,630 | $210,501 | 0.77% | D |
| 3BR | $1,980 | $268,417 | 0.74% | D |
| 4BR | $2,150 | $313,053 | 0.69% | D |
| 5BR | $2,494 | $319,102 | 0.78% | D |
U.S. Census Bureau data (2024)
The market analysis for Section 8 investors in ZIP code 48220, Ferndale, MI, reveals a favorable environment for those seeking stable rental income. The HUD Fair Market Rent (FMR) for the area is set at $1380 for the fiscal year 2024. This figure is significantly below the current market rent, which stands at $1,749 according to Zillow's ZORI index. As such, voucher tenants in this region will generate positive cash flow when renting at the HUD FMR, indicating that landlords can expect to earn approximately $369 more per unit than the voucher amount.
To further analyze the investment potential, consider the median home value in Ferndale, which is $245,125. Using this figure, we can derive the rent-to-price ratio, which is calculated by dividing the annual rent by the property value. With an annual rent of $1,749 multiplied by 12 months, the total annual rent is $20,988. Dividing this by the median home value gives us a rent-to-price ratio of about 8.56%. This suggests that the rental income represents a decent portion of the property's value, making it a reasonable investment option.
The median days on market (DOM) for properties in this area is 32 days, and the share of listings that experienced price cuts is only 0.2%. These metrics indicate a strong demand for housing, both for purchase and rental. The low DOM and minimal price cut share suggest that the local market is robust, with limited supply and high competition for available units. This dynamic benefits landlords as it ensures a steady stream of interested tenants and reduces vacancy risks.
In conclusion, the strongest angle for investors in ZIP code 48220 is the cash flow generated from the gap between HUD FMR and market rent. Landlords can expect consistent positive cash flow while maintaining a desirable rent-to-price ratio, making this area particularly attractive for those focused on rental income stability.
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.