Location: Des Moines-West Des Moines, 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 | $930 |
| 1 Bedroom | $970 |
| 2 Bedrooms | $1,150 |
| 3 Bedrooms | $1,570 |
| 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: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,150 | $282,304 | 0.41% | F |
| 3BR | $1,570 | $339,337 | 0.46% | F |
| 4BR | $1,610 | $534,437 | 0.3% | F |
U.S. Census Bureau data (2024)
In ZIP code 50261, located in Van Meter, Iowa, Madison County, the Section 8 housing program operates under specific economic guidelines that directly impact landlords and small-portfolio investors. The SAFMR (Small Area Fair Market Rent) for a two-bedroom apartment in this ZIP code for fiscal year 2024 is set at $1050. This SAFMR is specifically tailored to reflect the rental market conditions within ZIP 50261, ensuring that the subsidy amount accurately matches the local rental environment.
The local market rent for a two-bedroom unit, according to the Census American Community Survey (ACS), is slightly higher at $1,069. This indicates that the SAFMR closely aligns with the actual market rates, leaving little room for significant profit margins above the subsidy amount.
A Section 8 voucher works by covering the difference between the tenant's portion of the rent and the total rent due. The tenant typically pays 30% of their adjusted income towards rent. For example, if a tenant's adjusted monthly income is $1,500, they would pay $450 toward rent. The remaining amount up to the SAFMR is covered by the government through the voucher program. In this case, the government would reimburse the landlord $600 ($1050 - $450).
Beyond the base rent, the voucher also includes an allowance for utilities. The exact amount can vary based on the tenant’s utility usage and the type of utilities included in their lease agreement. For simplicity, let's assume an average utility allowance of $200 per month. This brings the total reimbursement to the landlord to $800 per month for a two-bedroom unit when the tenant's portion and utility allowance are factored in.
Given that the local market rent is $1,069, landlords will experience a shortfall when renting to tenants with Section 8 vouchers. The reimbursement gap for a two-bedroom apartment is therefore $269 per month ($1,069 - $800). This means landlords must either accept a lower effective rental rate or seek ways to reduce operating costs to maintain profitability.
To summarize, landlords in ZIP 50261 should expect to receive $1050 for a two-bedroom apartment from the government subsidy, plus an additional $200 for utilities, totaling $800 per month. With the local market rent at $1,069, there is a consistent shortfall of $269 per month that landlords must account for in their financial planning.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.