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 | $1,130 |
| 1 Bedroom | $1,260 |
| 2 Bedrooms | $1,570 |
| 3 Bedrooms | $1,910 |
| 4 Bedrooms | $2,080 |
| 5 Bedrooms | $2,413 |
| 6 Bedrooms | $2,703 |
| 7 Bedrooms | $2,919 |
| 8 Bedrooms | $3,065 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,570 | $297,157 | 0.53% | F |
| 3BR | $1,910 | $433,211 | 0.44% | F |
| 4BR | $2,080 | $559,246 | 0.37% | F |
| 5BR | $2,413 | $696,088 | 0.35% | F |
U.S. Census Bureau data (2024)
A decision tree for evaluating whether to purchase a property in ZIP 48381 (Milford, MI) for Section 8 investment involves three key gating questions.
1) Does the Fair Market Rent (FMR) of $1,450 cover the debt service on a property valued at $459,886?
To determine if the FMR can cover debt service, we must first calculate the expected annual debt service. Assuming a typical mortgage rate of 4.5%, the annual debt service would be approximately $20,745. This translates to a monthly debt service of about $1,729. Given that the FMR is $1,450, which is less than the required monthly debt service, the answer is No. The FMR does not clear the debt service on a $459,886 property, indicating that this investment would not be financially viable under Section 8 guidelines.
2) Is the market rent of $1,466 above, at, or below the FMR?
The market rent of $1,466 is slightly above the FMR of $1,450, suggesting that properties in this area are generally priced competitively with the market. However, since the FMR is the maximum allowable rent for Section 8, any property rented out under this program cannot exceed $1,450 per month. Therefore, the market rent being just above the FMR means that landlords will need to adjust their rental rates to comply with Section 8 requirements, potentially impacting profitability.
3) Are 18.4% of residents renters, and is the 16-day Days on Market (DOM) indicative of sufficient demand?
In ZIP 48381, 18.4% of residents are renters, and the average DOM is 16 days. These figures suggest a moderate level of rental demand. While the percentage of renters is not exceptionally high, the quick turnover indicated by the DOM points to a relatively healthy market. However, given the previous findings regarding FMR and debt service, the demand alone is not enough to justify an investment in this area for Section 8 purposes.
Based on these criteria, the overall recommendation for ZIP 48381 is No. The FMR does not sufficiently cover the debt service on a property valued at $459,886, making it an unprofitable venture under Section 8 guidelines despite the competitive market rent and moderate rental demand.
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.