Location: St. Joseph County, MI | Metro: Cass County, 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 | $740 |
| 1 Bedroom | $820 |
| 2 Bedrooms | $1,030 |
| 3 Bedrooms | $1,360 |
| 4 Bedrooms | $1,500 |
| 5 Bedrooms | $1,740 |
| 6 Bedrooms | $1,949 |
| 7 Bedrooms | $2,105 |
| 8 Bedrooms | $2,210 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,030 | $161,029 | 0.64% | D |
| 3BR | $1,360 | $224,259 | 0.61% | D |
| 4BR | $1,500 | $255,634 | 0.59% | F |
| 5BR | $1,740 | $318,635 | 0.55% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP 49093, Three Rivers, MI, reveals a detailed financial picture for potential investors. The Fair Market Rent (FMR) for a two-bedroom apartment in this area for fiscal year 2024 is set at $910 per month. When annualized, this equates to an annual rental income of $10,920. In contrast, the market rent for a similar property, based on Census ACS data, is $851 per month, which translates to an annual rental income of $10,212.
To calculate the implied gross yield, we divide the annual rental income by the median home value of $225,423. For the FMR scenario, the gross yield is approximately 4.85%. This is derived from $10,920 / $225,423 = 0.0485. For the market rent scenario, the gross yield drops slightly to about 4.53%, calculated as $10,212 / $225,423 = 0.0453.
Given the renter density of 26.5% in Three Rivers, MI, it is important to consider the likelihood of securing tenants under the Section 8 program. The vacancy rate, indicated by the N/A-day Days on Market (DOM), suggests that there might be challenges in determining how quickly units can be filled. However, the Section 8 program typically ensures a stable tenant pool with fewer vacancies, making the FMR-based gross yield of 4.85% more realistic for long-term investment planning.
While the market rent offers a slightly lower gross yield of 4.53%, the predictability of Section 8 rents can provide a more consistent cash flow, especially in areas where the rental market is less volatile. Investors should also factor in the administrative ease and government-backed payment structure of Section 8, which can offset the lower yield compared to market rates.
In conclusion, the Section 8 cap-rate for ZIP 49093 presents a gross yield range of 4.53% to 4.85%, depending on whether you use market rent or FMR for calculation. The higher yield associated with FMR reflects a more optimistic scenario that aligns well with the stability offered by the Section 8 program, particularly in light of the local renter density and the nature of the housing market in Three Rivers, MI.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.