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 | $1,560 |
| 1 Bedroom | $1,740 |
| 2 Bedrooms | $2,180 |
| 3 Bedrooms | $2,650 |
| 4 Bedrooms | $2,880 |
| 5 Bedrooms | $3,341 |
| 6 Bedrooms | $3,742 |
| 7 Bedrooms | $4,041 |
| 8 Bedrooms | $4,243 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,180 | $294,299 | 0.74% | D |
| 3BR | $2,650 | $420,226 | 0.63% | D |
| 4BR | $2,880 | $499,294 | 0.58% | F |
| 5BR | $3,341 | $610,285 | 0.55% | F |
U.S. Census Bureau data (2024)
The economics of Section 8 in ZIP 48331, Farmington Hills, MI, within Oakland County, revolve around the SAFMR (Small Area Fair Market Rent) for a two-bedroom apartment, which is set at $1940 for fiscal year 2024. This SAFMR rate is specifically tailored for this ZIP code, reflecting the local rental market conditions more accurately than a broader metro or county-level figure.
Local market rents, as measured by ZORI (Zillow Observed Rent Index), run at $1756 for a similar unit. Landlords might wonder how much they can expect from a voucher when the tenant's portion and utility allowances are factored into the equation. A Section 8 voucher pays a significant part of the rent but not the entire amount. The tenant is responsible for paying approximately 30% to 40% of their adjusted income towards rent, while the voucher covers the remainder up to the SAFMR limit.
Utility allowances vary based on the type of assistance and the region. In ZIP 48331, the allowance typically ranges between $300 to $500 per month, depending on the season and the specifics of the voucher program. This means if a landlord charges $1940 for a two-bedroom unit, the voucher will cover the difference beyond what the tenant can afford, up to the SAFMR cap.
To illustrate, if a tenant's portion is $582 (30% of an adjusted income of $1940), then the voucher would pay the remaining $1358. If the landlord charges $1940 and includes utilities in this amount, the voucher payment would be reduced by the utility allowance. For example, if the utility allowance is $400, the voucher would only contribute $958 towards the rent ($1358 - $400).
In ZIP 48331, given the SAFMR of $1940 and the local market rent at $1756, landlords who charge the SAFMR rate will have a reimbursement gap of $184 per month on average. This gap occurs because the voucher payment plus the tenant's contribution does not fully cover the SAFMR rate. Conversely, landlords who charge below the SAFMR rate, closer to the local market rent, will experience less of a gap and potentially even a surplus if the tenant's contribution is higher than the market rent minus the voucher payment.
Landlords should carefully consider these factors when setting rent for units participating in the Section 8 program. Charging exactly at the SAFMR rate may leave you with a small reimbursement gap, while setting the rent slightly below it could result in full coverage or a slight surplus, especially if the tenant's income allows for a higher contribution towards rent.
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.