Location: Otsego County, MI | Metro: Crawford 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 | $820 |
| 1 Bedroom | $980 |
| 2 Bedrooms | $1,140 |
| 3 Bedrooms | $1,530 |
| 4 Bedrooms | $1,610 |
| 5 Bedrooms | $1,868 |
| 6 Bedrooms | $2,092 |
| 7 Bedrooms | $2,259 |
| 8 Bedrooms | $2,372 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,140 | $174,775 | 0.65% | D |
| 3BR | $1,530 | $243,903 | 0.63% | D |
U.S. Census Bureau data (2024)
The economics of Section 8 in ZIP code 49756, which covers Lewiston, MI, in Oscoda County, operate under a specific set of financial guidelines. The SAFMR (Small Area Fair Market Rent) for a two-bedroom apartment in this ZIP code for fiscal year 2026 is set at $1,100. This figure represents the maximum amount that the housing authority will pay towards the rent for a two-bedroom unit. However, it's important to note that the local market rent, according to the Census ACS, averages around $828.
A Section 8 voucher works by covering the difference between the tenant’s contribution and the actual rent charged. The tenant is required to pay 30% of their adjusted income towards rent. If we assume an average adjusted income of $1,500 per month, the tenant would contribute approximately $450 towards rent. The housing authority then pays the landlord the remaining balance up to the SAFMR limit.
To illustrate, let's consider a landlord renting a two-bedroom unit at the market rate of $828. With a tenant contributing $450, the housing authority would cover the rest, which is $378. However, since the SAFMR is $1,100, the housing authority can reimburse up to this amount if the landlord charges more. But in this case, the landlord is charging less than the SAFMR, so there is no need for the housing authority to pay the full SAFMR amount.
In addition to the base rent, there are utility allowances that vary based on the type of unit and the location. For ZIP 49756, these allowances can add up to a few hundred dollars depending on the specific terms of the voucher. Typically, the utility allowance for a two-bedroom unit might be around $150. This means the total reimbursement a landlord could receive from the housing authority would be the tenant's portion plus the utility allowance, totaling around $600 for a unit rented at $828.
This leaves a surplus for the landlord when the local market rent is below the SAFMR. In ZIP 49756, with a market rent of $828 and a typical voucher reimbursement of around $600, the landlord still receives the full market rate, which is $228 above the reimbursement. This surplus allows landlords to participate in the Section 8 program while still earning a competitive rental income in their local market.
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.