Location: Mitchell County, IA | Metro: Floyd County, IA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $720 |
| 1 Bedroom | $810 |
| 2 Bedrooms | $970 |
| 3 Bedrooms | $1,240 |
| 4 Bedrooms | $1,370 |
| 5 Bedrooms | $1,589 |
| 6 Bedrooms | $1,780 |
| 7 Bedrooms | $1,922 |
| 8 Bedrooms | $2,018 |
U.S. Census Bureau data (2024)
The economics of Section 8 housing in ZIP code 50460 are defined by the Subsidized Average Fair Market Rent (SAFMR) and the local market rent. For a two-bedroom apartment, the SAFMR for FY 2026 is set at $970. This figure represents the maximum amount that the housing authority will pay on behalf of a tenant with a voucher. In contrast, the local market rent, based on Census American Community Survey (ACS) data, is $520. This lower figure reflects the average rent charged for similar units in the area.
A landlord should understand that the actual reimbursement from a voucher is calculated by taking into account both the tenant's portion of the rent and any utility allowances. The tenant typically pays 30% of their adjusted income towards rent, which can be less than the local market rent but must still be reasonable. If the tenant's portion plus the utility allowance does not meet the SAFMR, the difference is subsidized by the government up to the $970 limit. However, if the total exceeds $970, the landlord will need to accept the lower payment or find another solution to make up the difference.
To illustrate, let’s assume a tenant has an adjusted income that requires them to pay $300 towards rent, and there is a utility allowance of $150. The total payment would then be $450. Since this is below the SAFMR of $970, the government would subsidize the remaining $520 to reach the $970 limit. This ensures that landlords receive the SAFMR amount, which is higher than the local market rent of $520.
In ZIP 50460, the typical reimbursement gap or surplus for a two-bedroom unit is a surplus. Landlords receive a subsidy that is $450 above the local market rent, ensuring they are paid the SAFMR of $970. This makes Section 8 housing a stable and predictable income source for landlords in this area, despite the lower local market rents.
However, it’s important to note that while the SAFMR sets the upper limit for reimbursement, the actual amount can vary based on the tenant’s income and the specific terms of their voucher. Therefore, landlords should carefully review the voucher details and tenant’s financial situation before accepting a Section 8 tenant.
For small-portfolio investors, the stability offered by Section 8 vouchers can be particularly appealing. With guaranteed payments at the SAFMR level, investors can plan their finances without the uncertainty of market fluctuations. But they must also be aware of the administrative requirements and potential delays in receiving payments, which can affect cash flow management.
In summary, the economics of Section 8 in ZIP 50460 offer landlords and small-portfolio investors a reliable income stream, with a reimbursement rate that is $450 higher than the local market rent. This makes it a viable option for those looking to stabilize their rental income.
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.