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 | $970 |
| 1 Bedroom | $1,080 |
| 2 Bedrooms | $1,350 |
| 3 Bedrooms | $1,640 |
| 4 Bedrooms | $1,780 |
| 5 Bedrooms | $2,065 |
| 6 Bedrooms | $2,313 |
| 7 Bedrooms | $2,498 |
| 8 Bedrooms | $2,623 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,350 | $50,890 | 2.65% | A+ |
| 3BR | $1,640 | $74,856 | 2.19% | A+ |
| 4BR | $1,780 | $96,090 | 1.85% | A+ |
U.S. Census Bureau data (2024)
The economics of Section 8 housing in ZIP code 48227, located in Detroit, Michigan, within Wayne County, can be dissected into several key components. For fiscal year 2024, the SAFMR (Small Area Fair Market Rent) for a two-bedroom apartment in this specific ZIP code is set at $1100. This figure represents the maximum amount that the federal government will reimburse landlords for participating in the Section 8 Housing Choice Voucher program.
In contrast, the local market rent for a similar two-bedroom unit, as measured by ZORI (Zillow Observed Rent Index), stands at $1285. This discrepancy between the SAFMR and the actual market rent is a critical consideration for landlords and small-portfolio investors when deciding whether to accept Section 8 vouchers.
A landlord's income from a Section 8 tenant includes both the tenant's portion of the rent and any applicable utility allowances. Typically, the tenant is responsible for paying approximately 30% of their adjusted monthly income towards rent. If we assume an average adjusted monthly income of $1833 (which would yield a tenant contribution of $550), the total rental income per month would be the sum of the tenant's payment and the government reimbursement.
Given the SAFMR of $1100, the government would pay the difference between the tenant's contribution and the SAFMR, which in this case would be $550. Therefore, the total monthly income for a landlord would be $1100, comprising $550 from the tenant and $550 from the government. Utility allowances vary but are generally modest, typically around $200-$300 per month, which does not significantly alter the overall economic picture.
The SAFMR of $1100 is strictly set for this specific ZIP code, meaning it reflects the unique cost dynamics of the area. It is important to note that the SAFMR does not adjust based on individual property values or market conditions outside of the established ZIP code scope.
To summarize, the typical reimbursement gap for a two-bedroom apartment in ZIP 48227 is $185 per month ($1285 - $1100). This means landlords would receive less than the market rent for their properties if they choose to participate in the Section 8 program. However, the stability and reliability of the government reimbursement, along with the utility allowances, should be considered in the overall decision-making process.
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.