Location: Tama 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 | $660 |
| 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 | $131,167 | 0.72% | D |
| 3BR | $1,230 | $198,810 | 0.62% | D |
| 4BR | $1,590 | $248,931 | 0.64% | D |
U.S. Census Bureau data (2024)
The Section 8 thesis in ZIP code 50669 is centered around the discrepancy between the Fair Market Rent (FMR) set at $860 and the actual market rent reported at $914 for the fiscal year 2024. This represents a gap of $54, or approximately 6.3%, indicating that the market rent exceeds the FMR.
In this scenario, landlords and small-portfolio investors should be aware of the financial implications of accepting housing voucher tenants. While the FMR is lower than the market rent, it still provides a steady and reliable source of income. However, the cost of housing voucher tenants below open-market rates means that landlords will earn less per unit compared to renting out properties at the market rate. For instance, if a landlord rents out a property at the FMR of $860 instead of the market rent of $914, they lose $54 per month, which can significantly impact overall yields over time.
To anchor this analysis within the broader context of Iowa, consider the following statistics: 26.0% of residents are renters, the median home value is $189,195, and the median income is $81,650. These figures suggest that while a significant portion of the population relies on rental housing, there is also a notable disparity between income levels and housing costs. Accepting Section 8 vouchers could help fill units that might otherwise remain vacant due to high market rents, but it comes at the cost of reduced rental income.
Investors must weigh the benefits of guaranteed occupancy against the lower rental rates provided by the FMR. In ZIP 50669, where market conditions push rents higher, relying on Section 8 vouchers as a primary tenant source could limit potential returns, especially given the relatively high median home values and incomes in the area.
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.