Location: Sac County, IA | Metro: Buena Vista County, IA
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 | $710 |
| 1 Bedroom | $720 |
| 2 Bedrooms | $930 |
| 3 Bedrooms | $1,150 |
| 4 Bedrooms | $1,220 |
| 5 Bedrooms | $1,415 |
| 6 Bedrooms | $1,585 |
| 7 Bedrooms | $1,712 |
| 8 Bedrooms | $1,798 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $930 | $122,513 | 0.76% | D |
| 3BR | $1,150 | $169,046 | 0.68% | D |
| 4BR | $1,220 | $217,663 | 0.56% | F |
U.S. Census Bureau data (2024)
If a landlord is considering purchasing a property in ZIP code 50568 (Newell, IA) for Section 8 investment, they must evaluate several key factors:
1) Debt Service Coverage Ratio (DSCR): The Fair Market Rent (FMR) for the metro area in fiscal year 2026 is $920. To determine if this clears the debt service on a property valued at $173,246, calculate the DSCR. Assuming a typical mortgage rate of 4%, the annual mortgage payment would be approximately $10,200. The monthly debt service would then be around $850. Since the FMR is $920, it exceeds the debt service, providing a positive DSCR. This means that yes, the FMR can cover the debt service on a $173,246 property.
2) Market Rent Comparison: The average market rent in Newell, IA, as per the Census ACS data, is $783. This figure is below the FMR of $920. Therefore, if the landlord's goal is to ensure that rents are competitive with market rates, they will find that Section 8 rents are higher than what the market currently offers. This supports a "yes" for buying into Section 8 in this area, as it provides an opportunity to receive higher rental income than the market rate.
3) Rental Demand Assessment: The percentage of renters in the area is 19.7%. However, the days on market (DOM) for rental properties is listed as "N/A," which indicates insufficient data to assess how quickly properties are being rented out. Given the limited data, the answer to whether there is sufficient demand becomes "it depends." Landlords need to consider the following:
If the 19.7% rental population is stable and there are few alternatives for affordable housing, then demand could be strong enough to support Section 8 rentals.
Conversely, if there is significant competition from other affordable housing options or if the local economy is volatile, demand might not be consistent.
To conclude, based on the financial metrics provided, a landlord should proceed with interest in ZIP 50568 (Newell, IA) for Section 8 investment. The FMR comfortably covers debt service, and it exceeds the current market rent. However, the lack of data on days on market introduces uncertainty regarding demand stability. It is recommended to further investigate local economic conditions and housing availability before making a final decision.
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.