Location: Hardin 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 | $700 |
| 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 | $87,501 | 1.09% | B |
| 3BR | $1,230 | $146,635 | 0.84% | C |
| 4BR | $1,590 | $153,518 | 1.04% | B |
U.S. Census Bureau data (2024)
A skeptical investor might question whether the Fair Market Rent (FMR) of $860 for the fiscal year 2024 will adequately cover the mortgage on a home priced at $127,465. Current mortgage rates for homes in this area can vary, but with a typical rate around 4.5%, the monthly mortgage payment for a $127,465 home could range from $600 to $700, depending on the down payment and other factors. Given this, the FMR of $860 should comfortably cover the mortgage, leaving room for maintenance and property taxes.
The investor may also doubt the strength of the rental market, given that only 26.3% of the population are renters. However, this percentage translates into a significant number of potential tenants. According to Zillow, the average rent in 50627 is currently around $900, slightly higher than the FMR. This suggests a healthy demand for rental properties, even if the overall percentage of renters is relatively low.
Another concern is whether HUD vouchers will keep pace with the market rents of approximately $779. While specific data for ZIP 50627 is limited, the HUD FMR for the area is set at $860 for a one-bedroom unit in FY 2024. This indicates that the voucher amounts are likely to increase, aligning with the rising market rents. However, it's important to note that voucher amounts can vary based on the specific requirements of the tenant and the local housing authority's policies.
In summary, while some concerns may arise, the data suggests that the FMR is sufficient to cover mortgage payments, there is a decent demand for rental properties, and voucher amounts are expected to rise in line with market rents. For more detailed insights, it would be beneficial to consult local real estate agents or housing authorities for specific trends and policies in ZIP 50627.
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.