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 | $1,100 |
| 2 Bedrooms | $1,370 |
| 3 Bedrooms | $1,670 |
| 4 Bedrooms | $1,810 |
| 5 Bedrooms | $2,100 |
| 6 Bedrooms | $2,352 |
| 7 Bedrooms | $2,540 |
| 8 Bedrooms | $2,667 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,370 | $292,656 | 0.47% | F |
| 3BR | $1,670 | $488,376 | 0.34% | F |
| 4BR | $1,810 | $610,004 | 0.3% | F |
U.S. Census Bureau data (2024)
A skeptical investor might question whether the Fair Market Rent (FMR) of $1,360 for ZIP code 48367 (Leonard, MI) can sufficiently cover the mortgage on a home valued at $495,791. The FMR represents the maximum amount that a low-income household should pay for housing. However, it does not directly correlate to the mortgage payment on a higher-priced property. To determine if the FMR can cover the mortgage, an investor would need to consider the interest rate and loan terms. At a typical interest rate, the monthly mortgage payment for a home priced at $495,791 could exceed the FMR significantly.
The second objection centers around the adequacy of renter demand at a 4.5% vacancy rate. This percentage indicates that the rental market in Leonard, MI, is relatively tight, with a strong demand for rental properties. A lower vacancy rate suggests that landlords can potentially charge closer to the FMR without significant risk of vacancies. However, it's important to note that the vacancy rate alone does not guarantee high occupancy; other factors such as the quality of the property and its location also play a role.
Lastly, an investor might wonder if Housing Choice Vouchers will keep up with the market rent of $1,102. The voucher program aims to ensure that families do not spend more than 30% of their income on housing. In Leonard, MI, the average voucher payment is typically below the FMR, which means that landlords may need to adjust their expectations. While vouchers can help stabilize occupancy, they may not always cover the full market rent, especially in areas with higher property values. It's crucial for landlords to understand the potential gap between voucher payments and market rents when considering participation in the program.
These points highlight both the opportunities and challenges faced by landlords and small-portfolio investors in ZIP code 48367. Despite the strong rental market and reasonable vacancy rates, the alignment between FMR, market rents, and mortgage costs requires careful consideration. Additionally, reliance on vouchers should be balanced against the realities of what those vouchers can actually pay.
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.