Location: Taylor County, IA | Metro: Adams County, IA
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 | $840 |
| 2 Bedrooms | $930 |
| 3 Bedrooms | $1,260 |
| 4 Bedrooms | $1,360 |
| 5 Bedrooms | $1,578 |
| 6 Bedrooms | $1,767 |
| 7 Bedrooms | $1,908 |
| 8 Bedrooms | $2,003 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $930 | $100,687 | 0.92% | C |
| 3BR | $1,260 | $164,677 | 0.77% | D |
| 4BR | $1,360 | $198,124 | 0.69% | D |
U.S. Census Bureau data (2024)
The economics of Section 8 housing in ZIP code 50864, located in Montgomery County, Iowa, can be broken down into several key components to help landlords understand their financial situation when renting to tenants with vouchers.
The SAFMR (Small Area Fair Market Rent) for a two-bedroom apartment in ZIP 50864 for fiscal year 2026 is set at $920. This is the maximum amount that a Section 8 voucher will cover for rent in this specific ZIP code. However, it's important to note that the local market rent for a two-bedroom unit in this area is lower, at $716, according to the latest Census ACS data.
A Section 8 voucher is designed to cover the majority of a tenant's rent, but not all of it. The tenant is responsible for paying a portion of the rent themselves, typically around 30% of their income. This figure varies based on the individual tenant's income level. In addition to the tenant's contribution, there are utility allowances which also factor into the total payment structure. These allowances are meant to cover the cost of utilities such as electricity, gas, and water, and they vary depending on the size of the unit and the specific location.
To illustrate how this works, let's assume a tenant with a voucher is renting a two-bedroom apartment in ZIP 50864. If the market rent is $716, the tenant would pay approximately 30% of their income towards rent. For example, if their income is $1,000 per month, they would pay $300 towards rent, leaving $620 to be covered by the voucher. Since the SAFMR is $920, the voucher would cover the full market rent of $716, leaving a surplus of $204 for the landlord. This surplus can be used to cover other costs associated with renting, such as maintenance and property taxes.
If the rent is set at the SAFMR level of $920, the tenant would still only pay their 30% of income, and the voucher would cover the remaining amount up to $920. In this scenario, if the tenant's income is still $1,000 per month, they would pay $300, and the voucher would cover $620. This leaves a gap of $200 that the landlord must make up, either by lowering the rent or by finding another source of revenue.
In conclusion, the typical reimbursement gap or surplus for a two-bedroom apartment in ZIP 50864, given the market conditions and the SAFMR, is a surplus of $204 when the rent is set at the market rate of $716. Conversely, if the rent is set at the SAFMR of $920, there is a gap of $200 that the landlord must address. Landlords should carefully consider these factors when deciding whether to accept Section 8 tenants and at what rental rate.
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.