Location: Leelanau County, MI | Metro: Benzie 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 | $1,000 |
| 1 Bedroom | $1,230 |
| 2 Bedrooms | $1,350 |
| 3 Bedrooms | $1,620 |
| 4 Bedrooms | $1,790 |
| 5 Bedrooms | $2,076 |
| 6 Bedrooms | $2,325 |
| 7 Bedrooms | $2,511 |
| 8 Bedrooms | $2,637 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,620 | $455,421 | 0.36% | F |
U.S. Census Bureau data (2024)
A landlord considering ZIP 49640 for Section 8 investments must follow a structured decision-making process based on the financial metrics available. Begin by assessing whether the Fair Market Rent (FMR) of $1,200 for the metro area in fiscal year 2026 can cover the debt service on a property valued at $411,512. Debt service includes mortgage payments, property taxes, insurance, and maintenance costs.
If the answer to the first question is yes, proceed to the second step. Evaluate the market rent, which stands at $925 according to the Census ACS. Compare this figure to the FMR. In this case, the market rent is below the FMR, indicating that properties in ZIP 49640 may be undervalued relative to what Section 8 tenants can afford. This suggests potential for rental income growth if the property is priced competitively within the Section 8 limits.
The third question involves determining the demand for rental housing. The data indicates that 7.0% of residents are renters, but the Days on Market (DOM) is listed as N/A, which means there is insufficient data to determine how quickly properties are rented out. Given the low percentage of renters, it may depend on the specific location within the ZIP code and the type of property. However, the lack of DOM data makes it challenging to gauge the urgency of rental demand.
Decision Tree:
Does FMR of $1,200 clear debt service on a $411,512 property?
Yes: Consider the next metric.
No: Do not purchase. The FMR does not sufficiently cover the debt service, making the investment unprofitable under Section 8 guidelines.
Is market rent of $925 above, at, or below FMR?
Above: It depends. High market rents suggest strong local demand, but they exceed the FMR, limiting the pool of eligible Section 8 tenants.
At: It depends. Renters pay exactly the FMR, which balances demand and supply but offers limited flexibility.
Below: Yes. Lower market rents indicate a potential for higher occupancy rates among Section 8 tenants, who may find the area affordable.
Are 7.0% renters + N/A-day DOM enough demand?
Yes: Purchase. Despite the low percentage of renters, the potential for lower market rents aligning with Section 8 could still make the investment viable.
No: Do not purchase. The low percentage of renters combined with an unknown DOM suggests weak demand for rental properties.
It depends: More research is needed. Investigate the local rental market dynamics, including vacancy rates and rental trends, to better understand demand.
In summary, the decision to invest in ZIP 49640 for Section 8 properties hinges on the ability of the FMR to cover debt service, the relationship between market rent and FMR, and the strength of rental demand. With the current data, the investment appears feasible if the market rent remains below the FMR and the debt service is covered, though further investigation into the rental demand is advisable given the limited data on DOM.
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.