Location: Waterloo-Cedar Falls, 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 | $790 |
| 1 Bedroom | $870 |
| 2 Bedrooms | $1,140 |
| 3 Bedrooms | $1,460 |
| 4 Bedrooms | $1,910 |
| 5 Bedrooms | $2,216 |
| 6 Bedrooms | $2,482 |
| 7 Bedrooms | $2,681 |
| 8 Bedrooms | $2,815 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $870 | $66,653 | 1.31% | A |
| 2BR | $1,140 | $119,833 | 0.95% | C |
| 3BR | $1,460 | $173,324 | 0.84% | C |
| 4BR | $1,910 | $200,690 | 0.95% | C |
U.S. Census Bureau data (2024)
The ZIP code 50702, located in Waterloo, Iowa, presents an interesting scenario for both renters and landlords. The median household income in this area stands at $62,021, which places significant constraints on rental affordability. At the current market rate of $935 per month (ZORI), a substantial portion of the income—nearly 18%—would be allocated towards rent alone. This percentage is calculated based on the general guideline that housing costs should not exceed 30% of a household's gross income for it to be considered affordable.
Comparatively, the Fair Market Rent (FMR) for the zip code for fiscal year 2024 is set at $940, indicating that the market rate closely aligns with the government's benchmark for what is considered affordable in the area. However, the reality is that with such high rent prices relative to the median income, many households would struggle to cover other essential expenses without significant financial strain.
With 38.8% of the 20,882 population being renters, the competition among landlords is likely to be fierce. Given the tight budget constraints faced by most renters, landlords who offer properties that qualify for the Housing Choice Voucher program could attract a larger pool of tenants. These vouchers are designed to help low-income families afford decent, safe, and sanitary housing, thereby reducing the burden on renters and increasing the likelihood of timely rent payments.
Landlords considering their strategy between accepting voucher tenants versus relying solely on cash-paying tenants should weigh the benefits of each approach carefully. While cash-paying tenants might offer a smoother transaction process, the stability and reliability of voucher payments make them a viable option. In ZIP 50702, where the median income is relatively low compared to the rental rates, landlords who are willing to accept vouchers may find themselves with a more secure and consistent source of income.
In conclusion, the affordability gap in ZIP 50702 suggests that landlords who can accommodate Housing Choice Vouchers will have an advantage in attracting tenants. Although the market rate is only slightly below the voucher payment standard, the financial relief vouchers provide to renters makes them a valuable consideration for landlords looking to navigate the competitive rental market effectively.
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.