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 | $980 |
| 1 Bedroom | $1,090 |
| 2 Bedrooms | $1,360 |
| 3 Bedrooms | $1,660 |
| 4 Bedrooms | $1,800 |
| 5 Bedrooms | $2,088 |
| 6 Bedrooms | $2,339 |
| 7 Bedrooms | $2,526 |
| 8 Bedrooms | $2,652 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,360 | $251,359 | 0.54% | F |
| 3BR | $1,660 | $351,478 | 0.47% | F |
| 4BR | $1,800 | $538,888 | 0.33% | F |
| 5BR | $2,088 | $638,149 | 0.33% | F |
U.S. Census Bureau data (2024)
A decision tree for investing in ZIP 48362 (Lake Orion, MI) for Section 8 properties involves several key considerations based on the financial metrics provided.
1. Does the Fair Market Rent (FMR) of $1280 cover the debt service on a property valued at $378,959?
It depends. To determine if the FMR can cover debt service, you need to calculate the annual debt service based on the mortgage rate and term. For example, with a 30-year fixed-rate mortgage at 5%, the monthly payment would be approximately $1,980. The FMR of $1280 does not cover this amount. However, if the mortgage rate is lower, say 3%, the monthly payment would be around $1,600, which is still above the FMR. Therefore, unless you secure a very low mortgage rate or have a significant down payment reducing the loan amount, the FMR will likely not cover your debt service.
2. How does the market rent of $1,145 compare to the FMR?
The market rent of $1,145 is below the FMR of $1280. This suggests that the rental market is slightly undervalued compared to what the government deems as fair for Section 8 vouchers. Landlords might find opportunities to charge closer to the FMR without significantly deterring tenants, but they should be cautious about pricing too high relative to the local market conditions.
3. Is there sufficient demand from renters in ZIP 48362?
It depends. The data indicates that 13.6% of households are renters. However, the Days on Market (DOM) information is not available, making it difficult to assess how quickly units are rented. If the rental market is robust and units are typically leased within a short period, the percentage of renters could indicate strong demand. Conversely, if units remain on the market for extended periods, even the 13.6% figure might not translate into reliable income.
If the answer to question 1 is no:
Do not invest in Section 8 properties in ZIP 48362.
If the answer to question 1 is yes:
Evaluate the comparison between market rent and FMR.
If the answer to question 2 shows market rent significantly below FMR:
Consider adjusting your pricing strategy to align more closely with the FMR, but ensure it remains competitive.
If the answer to question 3 indicates sufficient demand:
Investment in Section 8 properties in ZIP 48362 is viable.
If the answer to question 3 indicates insufficient demand:
Do not invest in Section 8 properties in ZIP 48362.
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.