Location: Ames, IA | Metro: Ames, 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 | $880 |
| 1 Bedroom | $930 |
| 2 Bedrooms | $1,040 |
| 3 Bedrooms | $1,450 |
| 4 Bedrooms | $1,750 |
| 5 Bedrooms | $2,030 |
| 6 Bedrooms | $2,274 |
| 7 Bedrooms | $2,456 |
| 8 Bedrooms | $2,579 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,450 | $247,591 | 0.59% | F |
| 4BR | $1,750 | $295,858 | 0.59% | F |
U.S. Census Bureau data (2024)
The ZIP code 50056, located within the Ames, IA HUD Metro FMR Area, serves as a strategic component for a Section 8 portfolio, primarily functioning as a cash-flow anchor. The Fair Market Rent (FMR) for ZIP 50056 in fiscal year 2024 is set at $1080, which exceeds the current market rent of $1042. This $38 spread ensures that landlords can secure higher rental incomes compared to typical market rates, thereby stabilizing their cash flows.
Moreover, the median home value in ZIP 50056 stands at $255,430. Given the relatively low market rent, this suggests that property values are not excessively inflated, making it easier for landlords to acquire properties at reasonable costs without compromising on the potential for higher rental yields through Section 8 participation.
ZIP 50056 does not present significant opportunities for appreciation plays due to the lack of data on price-cut shares and days on market (DOM). These metrics would typically indicate a volatile market with fluctuating property values, but their absence here points to a stable environment where quick capital gains are less likely.
However, the ZIP code does offer some diversification benefits. With a renter share of 13.8%, landlords can expect a moderate demand for rental units. The median income of $73,333 indicates a middle-class population that is likely to include families eligible for Section 8 assistance, thus providing a steady stream of tenants who are financially capable of meeting their obligations under the program.
In summary, ZIP 50056 is best suited as a cash-flow anchor in a Section 8 portfolio strategy. Landlords can rely on the guaranteed higher rents from the FMR to offset any risks associated with tenant turnover or maintenance costs, ensuring a consistent and reliable income stream. Additionally, the moderate demand for rental housing and the presence of a stable middle-income population further reinforce its role as a dependable asset in a diversified real estate investment portfolio.
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.