Location: Isabella County, MI | Metro: Midland, MI MSA
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 | $830 |
| 1 Bedroom | $840 |
| 2 Bedrooms | $1,080 |
| 3 Bedrooms | $1,370 |
| 4 Bedrooms | $1,520 |
| 5 Bedrooms | $1,763 |
| 6 Bedrooms | $1,975 |
| 7 Bedrooms | $2,133 |
| 8 Bedrooms | $2,240 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,080 | $156,670 | 0.69% | D |
| 3BR | $1,370 | $221,396 | 0.62% | D |
| 4BR | $1,520 | $275,115 | 0.55% | F |
U.S. Census Bureau data (2024)
The economics of Section 8 in ZIP code 48883, which encompasses Shepherd, MI, in Isabella County, operate under specific parameters. The SAFMR (Small Area Fair Market Rent) for a two-bedroom apartment in this ZIP code for fiscal year 2024 is set at $910. This figure is crucial because it represents the maximum amount that the housing authority will pay towards a rental subsidy for a two-bedroom unit in this area.
Local market rent, according to Census ACS data, averages $842 for a similar two-bedroom unit. This indicates that the SAFMR is higher than the average market rent, providing a buffer for landlords who participate in the program. When a tenant uses a Section 8 voucher, they are responsible for paying a portion of the rent themselves, typically around 30% of their income. For the sake of clarity, let's assume a tenant's portion is $273 based on an average income.
The voucher system also includes utility allowances, which can vary but generally aim to cover the cost of utilities for the tenant. In ZIP 48883, these allowances might be structured to complement the tenant's payment, ensuring that the total rent plus utilities does not exceed the SAFMR. Therefore, if the tenant pays $273 and the utility allowance is included, the landlord receives the remaining balance up to the $910 limit.
To illustrate, if the total rent and utilities for a two-bedroom unit is $910, and the tenant pays $273, the housing authority would cover the rest, making up the difference to ensure the landlord receives the full SAFMR amount. If the total rent and utilities are less than $910, the landlord still receives the full amount as long as it doesn't exceed the SAFMR cap.
In ZIP 48883, the typical reimbursement scenario for a two-bedroom unit leaves a landlord with a surplus. Given the SAFMR of $910 and the average market rent of $842, landlords participating in Section 8 can expect to receive the full SAFMR amount, resulting in a surplus of $68 per month over the average market rate. This surplus makes the Section 8 program attractive to landlords, as it ensures a steady, government-backed income stream that exceeds the local market average.
Note that the SAFMR is specifically set for this ZIP code, meaning it reflects the unique economic conditions and rental costs within ZIP 48883. Landlords should also be aware of the administrative requirements and background checks associated with accepting Section 8 tenants, which are part of the overall package.
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.