Location: Sioux County, IA | Metro: Lyon 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 | $720 |
| 1 Bedroom | $740 |
| 2 Bedrooms | $970 |
| 3 Bedrooms | $1,160 |
| 4 Bedrooms | $1,280 |
| 5 Bedrooms | $1,485 |
| 6 Bedrooms | $1,663 |
| 7 Bedrooms | $1,796 |
| 8 Bedrooms | $1,886 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $970 | $153,635 | 0.63% | D |
| 3BR | $1,160 | $203,182 | 0.57% | F |
| 4BR | $1,280 | $272,498 | 0.47% | F |
| 5BR | $1,485 | $329,873 | 0.45% | F |
U.S. Census Bureau data (2024)
The economics of Section 8 in ZIP code 51201, located in Sheldon, Iowa, O'Brien County, are straightforward. The SAFMR (Small Area Fair Market Rent) for a two-bedroom apartment in this ZIP code for fiscal year 2026 is set at $920. This figure represents the maximum amount that the Housing Choice Voucher program will pay for rent in this specific area.
In comparison, the local market rent for a two-bedroom unit in ZIP 51201 is slightly higher at $930, according to the latest Census American Community Survey (ACS) data. This indicates that landlords who participate in the Section 8 program may face a slight shortfall when compared to the market rate.
When a tenant uses a Section 8 voucher, they are typically responsible for paying 30% of their adjusted income towards rent. For instance, if a tenant's monthly adjusted income is $1,500, they would contribute $450 towards rent. The remaining amount is covered by the voucher, up to the SAFMR limit. In this case, the voucher would cover $470 ($920 - $450).
Utility allowances can vary based on the household size and other factors, but they are generally lower than the actual cost of utilities. For a two-bedroom apartment, the utility allowance might be around $200 per month, which is often less than the actual utility expenses incurred by tenants.
To illustrate, let’s assume the total rent plus utilities for a two-bedroom apartment is $1,130 ($930 rent + $200 utilities). If a landlord charges the full market rent of $930 and includes utilities, the voucher would cover $920, leaving the landlord to make up the difference of $10 between the SAFMR and the market rent. Additionally, the landlord would need to cover the $130 difference between the actual utility costs and the allowance.
In summary, the typical reimbursement gap for a two-bedroom apartment in ZIP 51201 is $140 per month. This gap arises from the $10 difference between the SAFMR and the market rent, combined with the $130 shortfall in utility allowances. Landlords should factor in this gap when considering participation in the Section 8 program.
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.