Location: Adair County, IA | Metro: Des Moines-West Des Moines, 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 | $910 |
| 2 Bedrooms | $1,080 |
| 3 Bedrooms | $1,470 |
| 4 Bedrooms | $1,520 |
| 5 Bedrooms | $1,763 |
| 6 Bedrooms | $1,975 |
| 7 Bedrooms | $2,133 |
| 8 Bedrooms | $2,240 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,080 | $222,316 | 0.49% | F |
| 3BR | $1,470 | $291,918 | 0.5% | F |
| 4BR | $1,520 | $348,388 | 0.44% | F |
U.S. Census Bureau data (2024)
A decision tree for ZIP code 50070 (Dexter, IA) when considering a purchase for Section 8 investment would follow these steps:
Step 1: Debt Service Coverage Ratio (DSCR)
Does the Fair Market Rent (FMR) of $1040 for fiscal year 2024 cover the debt service on a property valued at $239,016?
If the annual debt service is less than $12,480 (which is 12 times $1040), then the answer is yes. The FMR clears the debt service, indicating that a Section 8 tenant could afford the rent.
If the annual debt service exceeds $12,480, the answer is no. The FMR does not cover the debt service, making the property unviable for Section 8 tenants.
Step 2: Market Rent Comparison
Is the market rent of $855 (from Census ACS data) above, at, or below the FMR of $1040?
If the market rent is below the FMR, then the answer is yes. This suggests that the market rent is lower than what Section 8 pays, making it a good opportunity for landlords who can take advantage of higher government subsidies.
If the market rent is above or equal to the FMR, then the answer is it depends. Landlords must consider whether the higher market rent justifies the investment over relying on Section 8 subsidies.
Step 3: Demand Assessment
Are there sufficient renters and days on the market (DOM) to support demand? With 15.7% of residents being renters and the DOM data not available, we must rely on the rental percentage.
If the rental percentage is high and the area has a history of low DOM, then the answer is yes. The demand is strong enough to support a Section 8 property.
If the rental percentage is low or if the DOM is high, then the answer is no. There isn't enough demand to justify the investment in a Section 8 property.
In summary, for ZIP 50070, if the debt service is covered by the FMR, the market rent is below the FMR, and the rental population is sufficient, then the answer is yes. A Section 8 property in Dexter, IA, would be a viable investment. However, if any of these conditions are not met, then the answer is no or it depends, requiring further analysis.
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.