Location: Hamilton County, IA | Metro: Boone County, IA 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 | $770 |
| 1 Bedroom | $770 |
| 2 Bedrooms | $970 |
| 3 Bedrooms | $1,340 |
| 4 Bedrooms | $1,460 |
| 5 Bedrooms | $1,694 |
| 6 Bedrooms | $1,897 |
| 7 Bedrooms | $2,049 |
| 8 Bedrooms | $2,151 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $770 | $99,895 | 0.77% | D |
| 2BR | $970 | $162,263 | 0.6% | F |
| 3BR | $1,340 | $230,665 | 0.58% | F |
| 4BR | $1,460 | $299,117 | 0.49% | F |
| 5BR | $1,694 | $402,000 | 0.42% | F |
U.S. Census Bureau data (2024)
A skeptical investor might question whether investing in ZIP 50036, specifically Boone, Iowa, is financially viable. Here are three common objections along with the relevant data to consider:
Objection 1: Will Fair Market Rent (FMR) of $910 (for zip code FY 2024) cover the mortgage on a $208,480 home?
The FMR of $910 does not directly indicate the mortgage payment but can be used to gauge rental income potential. A median home value of $208,480 suggests that the typical mortgage payment for a property in this area could be around $1,000 to $1,200 per month, depending on interest rates and loan terms. Given an FMR of $910, it's clear that the rental income alone will not fully cover the mortgage payment. However, this does not mean the investment is unviable. Investors should consider the total cost of ownership including maintenance, property taxes, and insurance. Additionally, the FMR is subject to change annually based on HUD assessments.
Objection 2: Is there enough renter demand at 23.2%?
The 23.2% represents the percentage of households that rent their homes in ZIP 50036. This figure is relatively low compared to national averages, which hover around 36%. However, the low renter demand percentage does not necessarily translate into poor investment opportunities. The demand for affordable housing can still be strong in areas with lower overall renter percentages. The key metric here is the number of renters who qualify for Section 8 assistance, which can be determined by local housing authority data.
Objection 3: Will vouchers keep pace with $847 market rents?
The current market rent of $847 is slightly below the FMR of $910. Vouchers are designed to cover a portion of the market rent up to the FMR. In ZIP 50036, voucher holders should have no issue covering the market rent. However, the long-term sustainability of this alignment depends on HUD’s annual adjustments to the FMR and the local housing authority's ability to manage the voucher program effectively. There is no guarantee that voucher amounts will continue to match market rents without lag, but historically, they have been adjusted to remain competitive.
In summary, while the FMR of $910 may not fully cover the mortgage payment on a $208,480 home, it does provide a baseline for rental income. The lower renter demand percentage of 23.2% indicates a smaller pool of potential tenants, but the focus on affordable housing can still attract qualified Section 8 participants. Lastly, vouchers are expected to keep pace with the market rent of $847, though this is subject to annual adjustments by HUD.
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.