Section 8 Fair Market Rent (FMR) for ZIP 50673 - 2027

FY 2027 Fair Market Rent Rates

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

To determine if you should buy in ZIP code 50673 for Section 8 investment, follow this decision tree:

1) Does the FMR of $900 cover the debt service on a property?

• Yes: If your debt service is less than $900, then the FMR can adequately support your mortgage payments and expenses. This is a positive sign for potential profitability.
• No: If your debt service exceeds $900, the FMR will not be sufficient to cover your costs. This makes the investment unviable under current conditions.
• It Depends: If your debt service is close to $900, consider other income sources such as tax benefits or rental increases. However, the primary focus should remain on whether the FMR comfortably covers your debt service.

2) How does the market rent of $775 compare to the FMR?

• Above FMR: If the market rent is higher than $900, you might consider traditional market renting instead of relying solely on Section 8. This scenario suggests better returns outside of Section 8.
• At FMR: If the market rent is around $900, you can leverage both market and Section 8 tenants, depending on the specific unit and demand.
• Below FMR: With market rent at $775, Section 8 provides a stable income source that is above the market rate. This makes Section 8 a viable option for steady cash flow.

3) Is there enough demand with 18.5% renters and N/A-day days on market (DOM)?

• Yes: If the days on market is low, indicating quick turnover, and the percentage of renters is high, there's likely strong demand for rental properties. This supports the viability of a Section 8 investment.
• No: If the DOM is high, suggesting slow leasing times, even with a high percentage of renters, the investment may not generate sufficient cash flow to justify the purchase.
• It Depends: If the DOM is moderate, the investment could still be worthwhile, especially if you can manage the property efficiently and attract Section 8 tenants quickly.

In conclusion, purchasing a property in ZIP 50673 for Section 8 investment hinges on whether the FMR of $900 can cover your debt service, the comparison between market rent and FMR, and the strength of rental demand. Analyze these factors carefully before making a decision.

Data Sources: FMR data from HUD (2027). 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.