Section 8 Fair Market Rent (FMR) for ZIP 50234 - 2027

FY 2027 Fair Market Rent Rates

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

A landlord considering investing in ZIP code 50234 for Section 8 properties must follow a structured decision-making process based on the following criteria:

• Does FMR $860 (ZIP FY 2024) clear debt service on a $249,389 property?
  • If yes: The Fair Market Rent (FMR) of $860 is sufficient to cover the debt service on a property valued at $249,389. This indicates that the rental income can meet the financial obligations of owning the property, including mortgage payments and other costs.
  • If no: The FMR of $860 does not clear the debt service on a $249,389 property. This means the rental income is insufficient to cover the financial obligations, making it an unwise investment for Section 8 purposes.
• Is market rent $491 (Census ACS) above, at, or below FMR?
  • If market rent is above FMR: With a market rent of $491 being below the FMR of $860, landlords can potentially attract non-Section 8 tenants willing to pay higher rents. However, this scenario is unlikely given the data presented.
  • If market rent is at FMR: The market rent of $491 aligns closely with the FMR of $860, indicating that landlords can expect to charge close to the FMR without significant adjustments. This alignment suggests stability but also limits the potential for premium pricing.
  • If market rent is below FMR: Given that the market rent of $491 is below the FMR of $860, landlords will be able to leverage the higher FMR to secure Section 8 tenants. This gap between market rent and FMR is favorable for those specifically targeting Section 8 housing.
• Are 15.5% renters + N/A-day DOM enough demand?
  • If there is sufficient demand: The 15.5% of renters in ZIP 50234, combined with the unknown days on market (DOM), suggest that there is enough tenant demand to fill vacancies. Landlords can expect a steady flow of interested tenants.
  • If there is insufficient demand: The 15.5% of renters may not be enough to sustain a high occupancy rate if the days on market (DOM) are long. This could indicate a challenge in filling vacancies quickly, affecting cash flow and profitability.

Decision Outcome:

• Yes: If the FMR clears the debt service and the market rent is below the FMR, with adequate tenant demand, then buying in ZIP 50234 for Section 8 is a sound investment. The FMR of $860 covers the necessary financial obligations, while the lower market rent of $491 allows for attracting Section 8 tenants at a higher rate. The 15.5% of renters ensures a stable demand for housing.
• No: If the FMR does not clear the debt service or if the market rent is above the FMR, then buying in ZIP 50234 for Section 8 is not advisable. In either case, the financial viability of the property is compromised, leading to potential losses.
• It Depends: If the days on market (DOM) are significantly longer, indicating low demand despite the favorable FMR and market rent conditions, then the decision to invest in ZIP 50234 for Section 8 becomes contingent upon other factors such as the ability to manage vacancies and the overall economic outlook of the area.

Data Sources: FMR data from HUD (2027). 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.