Location: Grand Rapids-Wyoming, MI | Metro: Grand Rapids-Wyoming, 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 | $1,460 |
| 1 Bedroom | $1,530 |
| 2 Bedrooms | $1,830 |
| 3 Bedrooms | $2,370 |
| 4 Bedrooms | $2,710 |
| 5 Bedrooms | $3,144 |
| 6 Bedrooms | $3,521 |
| 7 Bedrooms | $3,803 |
| 8 Bedrooms | $3,993 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,830 | $463,854 | 0.39% | F |
| 3BR | $2,370 | $441,305 | 0.54% | F |
| 4BR | $2,710 | $540,959 | 0.5% | F |
U.S. Census Bureau data (2024)
A skeptical investor looking into ZIP code 49306, located in Belmont, Michigan, might raise several concerns regarding the feasibility of investing in rental properties under the Section 8 program. Let's address these objections directly with available data.
Objection 1: Will Fair Market Rent (FMR) of $1540 for FY 2024 cover the mortgage on a $489,289 home?
The Fair Market Rent (FMR) set by HUD for ZIP 49306 is $1540 for FY 2024. This figure represents the average rent that HUD expects for a modest apartment in the area. However, the cost of a typical home in Belmont, priced at $489,289, is significantly higher. The FMR does not directly correlate to the mortgage payment on a home of this value. To determine if the FMR covers the mortgage, an investor must calculate the monthly mortgage payment based on current interest rates and loan terms. As the data does not provide the exact mortgage rate or term length, it is impossible to definitively state whether the FMR will cover the mortgage. However, it is clear that the FMR is lower than what would be expected for a home of this price range.
Objection 2: Is there enough renter demand at 4.0%?
The 4.0% figure likely refers to the percentage of households participating in the Section 8 program. This low participation rate suggests that demand for subsidized housing is limited. However, this does not necessarily indicate a lack of overall rental demand. The percentage alone does not provide insight into the total number of renters in Belmont or the vacancy rates. An investor should consider broader rental market conditions, such as the number of renters versus homeowners, and the local economy's ability to support rental income beyond Section 8 subsidies. Unfortunately, the data provided does not offer comprehensive details on these factors, making it challenging to assess the total rental demand accurately.
Objection 3: Will vouchers keep pace with N/A market rents?
The data provided does not specify the current market rents in Belmont, Michigan, which makes it difficult to compare voucher amounts with market rates. However, historically, HUD adjusts the FMR annually to reflect changes in the local rental market. If the FMR is adjusted upwards to match rising market rents, the vouchers should theoretically keep pace. Yet, the actual performance of voucher amounts relative to market rents can vary due to delays in adjustments and local economic conditions. Without specific figures on market rents, it is uncertain how well vouchers will align with them in ZIP 49306.
In summary, while the data provides some insights into the rental market and Section 8 participation in Belmont, Michigan, it falls short of giving a complete picture. Investors should seek additional local market analysis and financial projections to make informed decisions.
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.