Location: Sanilac County, MI | Metro: Sanilac County, MI
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 | $720 |
| 1 Bedroom | $780 |
| 2 Bedrooms | $1,010 |
| 3 Bedrooms | $1,300 |
| 4 Bedrooms | $1,340 |
| 5 Bedrooms | $1,554 |
| 6 Bedrooms | $1,740 |
| 7 Bedrooms | $1,879 |
| 8 Bedrooms | $1,973 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,010 | $214,328 | 0.47% | F |
| 3BR | $1,300 | $282,046 | 0.46% | F |
| 4BR | $1,340 | $354,446 | 0.38% | F |
U.S. Census Bureau data (2024)
The economics of Section 8 housing in ZIP code 48450, which includes Lexington, MI, in Sanilac County, revolve around the SAFMR (Small Area Fair Market Rent) set by HUD. For fiscal year 2026, the SAFMR for a two-bedroom apartment in this ZIP code is $970. This figure is specifically tailored to reflect the rental costs in this area, ensuring it aligns with local market conditions.
Local market rents, as reported by the Census ACS, stand at $847 for a two-bedroom unit. This represents the average rent charged for similar units in the same area. When a landlord participates in the Section 8 program, they agree to accept a Housing Choice Voucher (HCV) from eligible tenants. The voucher covers most of the rent, but not all. Tenants are responsible for paying a portion of the rent themselves, typically around 30% of their income.
To illustrate how the reimbursement works, let's assume a tenant with a voucher for a two-bedroom unit in ZIP 48450. The maximum amount the government will pay under the Section 8 program is the SAFMR of $970. If the tenant's portion of the rent is $291 (which is 30% of a hypothetical income of $970), then the total rent the landlord would receive from the voucher program is the sum of the tenant's contribution and the government subsidy. However, the government only subsidizes up to the SAFMR limit, so if the landlord charges more than $970, they will not receive the excess from the voucher program.
In addition to the base rent, there are utility allowances that can vary based on the size of the unit and the location. For ZIP 48450, the utility allowance for a two-bedroom unit is $350 per month. This allowance is intended to cover the cost of utilities such as electricity, water, and gas. The landlord should consider these allowances when determining the total compensation they will receive from a Section 8 tenant.
Given the SAFMR of $970 and the local market rent of $847, landlords in ZIP 48450 can expect a slight surplus if they charge the market rate. The difference between the SAFMR and the market rent is $123 ($970 - $847). This means that if a landlord charges the market rate of $847, they will still receive the full market rent plus any applicable utility allowances, without leaving a reimbursement gap.
However, if a landlord chooses to charge above the SAFMR, they will have to absorb the difference, creating a reimbursement gap. For instance, charging $1,000 would leave a gap of $30 ($1,000 - $970). Conversely, setting the rent below the SAFMR could result in a surplus for the landlord, although it's uncommon for landlords to set rents below the SAFMR as it might not be financially beneficial.
In summary, for a two-bedroom apartment in ZIP 48450, the typical reimbursement scenario involves receiving the full SAFMR of $970, which includes the tenant's portion and the government subsidy, plus an additional $350 for utilities. Landlords should aim to balance their rent charges with the SAFMR to ensure steady cash flow and avoid financial gaps.
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.