Section 8 Fair Market Rent (FMR) for ZIP 50613 - 2027

Investment Score for ZIP 50613

Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)

FY 2027 Fair Market Rent Rates

Unit Size	Monthly FMR
Studio	$910
1 Bedroom	$1,000
2 Bedrooms	$1,310
3 Bedrooms	$1,670
4 Bedrooms	$2,190
5 Bedrooms	$2,540
6 Bedrooms	$2,845
7 Bedrooms	$3,073
8 Bedrooms	$3,227

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
2BR	$1,310	$187,500	0.7%	D
3BR	$1,670	$265,356	0.63%	D
4BR	$2,190	$341,307	0.64%	D
5BR	$2,540	$518,328	0.49%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 50613 (Cedar Falls, IA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for Cedar Falls, IA, as per the 2026 data, is set at $1210 for a two-bedroom unit. This amount represents 18.5% of the median household income in the area, which stands at $78,503. However, the actual rent for a two-bedroom unit can be significantly higher. The Zillow median price for a two-bedroom property in ZIP code 50613 is $177,782, which translates into a monthly rental cost that is approximately 12.2 times the FMR. This means that landlords who charge market rates for their properties are unlikely to find many Section 8 voucher holders able to cover the rent. For instance, a typical market rate for a two-bedroom apartment would be around $14,500 annually ($177,782 / 12.2), or roughly $1,206 per month. Given that the FMR is only $1210, the gap between the FMR and the actual rent is substantial, making it challenging for voucher holders to secure housing in Cedar Falls. #### Affordability & Renter Profile In Cedar Falls, 33.9% of the population are renters, indicating a significant demand for rental properties. With a population of 43,867, this translates to about 14,866 renters. The occupancy rate of 94.7% suggests that the rental market is relatively tight, with most available units being occupied. This high occupancy rate indicates that there is little room for new rentals to enter the market without impacting existing tenants. Given the median household income of $78,503, the affordability of housing is a critical issue. The FMR for a three-bedroom unit is $1560, which is 20% of the median income. This means that families earning close to the median income might struggle to afford a three-bedroom home even at the FMR. The disparity between the FMR and market rates further exacerbates the challenge for lower-income families to find affordable housing. #### Investor Angle From an investor perspective, the ZIP code 50613 presents a mixed picture. While the FMRs provide a baseline for what the government considers fair rent, the actual market rates are much higher. A landlord charging the FMR for a two-bedroom unit at $1210 would likely see positive cash flow compared to market rates, but they would also face competition from higher-priced units. To evaluate the investment grade, we need to consider the potential for rental income versus the cost of acquiring and maintaining the property. Given the Zillow median price of $177,782, the price-to-FMR ratio of 12.2x suggests that purchasing a property at market value and renting it out at FMR would result in a significant loss unless the investor can leverage other factors such as tax benefits or long-term appreciation. However, if an investor were to purchase a property below market value or acquire a distressed property, the potential for cash flow could be more favorable. For example, if a two-bedroom property were purchased for $140,000, the annualized cost would be around $10,000 (assuming a 7% cap rate). At an FMR of $1210 per month, the annual rental income would be $14,520, resulting in a positive cash flow of $4,520 before expenses. This scenario would make the investment more attractive, especially considering the high occupancy rates and steady demand for rental units. #### Specific Actionable Insights 1. **Focus on Below-Market Properties**: Investors should focus on acquiring properties that are priced below the Zillow median. For instance, a two-bedroom unit priced at $140,000 would offer a positive cash flow when rented at the FMR of $1210. This strategy leverages the high occupancy rates and ensures that the property remains affordable for Section 8 voucher holders. 2. **Consider One-Bedroom Units**: The FMR for a one-bedroom unit is $920, which is still a reasonable portion of the median income. Investing in one-bedroom units could provide a better balance between affordability and market demand, given that the Zillow median price for these units is likely lower than for two-bedroom units. 3. **Utilize Tax Benefits**: Investors should take advantage of tax benefits such as depreciation and mortgage interest deductions to offset the lower rental income. These benefits can significantly improve the overall financial performance of the investment. #### Bottom Line For Section 8-focused investors, the ZIP code 50613 presents a challenging yet potentially rewarding opportunity. The high occupancy rates and significant demand for rental properties suggest a strong market, but the disparity between FMR and market rates makes it difficult to compete with non-voucher properties. Therefore, the recommendation is to **Buy** properties that are priced below the market median, particularly one-bedroom units, to ensure positive cash flow and meet the needs of low-income renters. However, investors must be prepared to navigate the complexities of working with Section 8 vouchers and the associated administrative requirements.

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.