Location: Butler County, IA | Metro: Waterloo-Cedar Falls, 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 | $690 |
| 1 Bedroom | $730 |
| 2 Bedrooms | $950 |
| 3 Bedrooms | $1,230 |
| 4 Bedrooms | $1,590 |
| 5 Bedrooms | $1,844 |
| 6 Bedrooms | $2,065 |
| 7 Bedrooms | $2,230 |
| 8 Bedrooms | $2,342 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $950 | $153,668 | 0.62% | D |
| 3BR | $1,230 | $187,161 | 0.66% | D |
| 4BR | $1,590 | $211,487 | 0.75% | D |
U.S. Census Bureau data (2024)
Ackley, IA, ZIP code 50604, is a modest-sized community with a total population of 1,590 residents. Only 12.7% of these residents are renters, indicating a primarily owner-occupied environment. The median household income in this area stands at $66,776, which suggests a middle-class neighborhood where most residents can afford their living expenses without significant financial strain. The median home value in Ackley is $179,399, reflecting an affordable housing market for potential homeowners.
The rental economics in Ackley present a mixed picture for investors. The Fair Market Rent (FMR), which is the amount set by the U.S. Department of Housing and Urban Development (HUD) for Section 8 vouchers, is $860 per month for ZIP code 50604 in fiscal year 2024. However, the average market rent, according to the Census Bureau's American Community Survey (ACS), is significantly lower at $627 per month. This discrepancy means that landlords who accept Section 8 vouchers can potentially charge more than the market rate, leading to higher rental income compared to typical market conditions.
Given these economic realities, Ackley, IA, ZIP 50604, would suit both hands-off voucher operators and hands-on value-add buyers. For hands-off operators, the higher FMR compared to the market rent provides a stable and predictable income stream. They can rely on the government subsidy to cover the majority of the rent, ensuring consistent cash flow with minimal tenant management concerns.
On the other hand, value-add buyers could find opportunities to improve properties and increase their value, leveraging the difference between the FMR and market rent to enhance profitability. These investors might focus on upgrading properties to command rents closer to the FMR, thereby maximizing returns while still benefiting from the Section 8 program.
In conclusion, Ackley, IA, offers a balanced environment for Section 8 investors. With a relatively low percentage of renters and a middle-class income profile, it supports a steady demand for subsidized housing. The gap between the FMR and market rent presents a unique opportunity for both passive and active investors to capitalize on the Section 8 program, making ZIP 50604 a viable option for real estate investment.
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.