Location: Fayette 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 | $1,260 |
| 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 | $232,902 | 0.41% | F |
| 3BR | $1,260 | $267,553 | 0.47% | F |
| 4BR | $1,590 | $317,192 | 0.5% | F |
U.S. Census Bureau data (2024)
The Section 8 thesis for Fairbank, Iowa, located in ZIP code 50629, is centered around the disparity between the Fair Market Rent (FMR) and the actual market rent. For fiscal year 2024, the FMR is set at $900, while the Census ACS data indicates that the average market rent is $686. This creates a significant gap of $214, or approximately 31%, in favor of the FMR.
This gap makes it a compelling yield play for landlords and small-portfolio investors. With the FMR being higher than the market rent, properties leased to voucher tenants can command rents closer to the $900 mark. This means that landlords can potentially increase their rental income by $214 per month without raising the rent above what voucher holders are eligible for, thus enhancing their cash flow and investment returns.
In the context of Fairbank, where only 12.5% of residents are renters, and the median home value stands at $270,446, the opportunity to attract voucher tenants becomes even more attractive. The median household income in Fairbank is $103,106, which suggests that many residents might find it challenging to afford rental units at market rates, let alone higher-priced voucher units. However, for those who qualify for housing vouchers, the subsidy effectively bridges the affordability gap, making these units accessible.
The higher FMR compared to the market rent also serves to mitigate the risk associated with lower-income tenants, who might otherwise struggle to meet the monthly rent payments. By ensuring that the rental income is closer to the FMR, landlords can maintain a steady and reliable source of income, despite the relatively low percentage of renters in the area.
To summarize, the $214 gap, or 31%, between the FMR and the market rent in ZIP 50629 presents a clear advantage for landlords and investors. It allows them to capitalize on the higher subsidy amounts, improving yields and reducing financial risks inherent in renting to lower-income individuals.
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.