Location: Lyon County, IA | Metro: Lyon County, IA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $690 |
| 1 Bedroom | $710 |
| 2 Bedrooms | $930 |
| 3 Bedrooms | $1,110 |
| 4 Bedrooms | $1,220 |
| 5 Bedrooms | $1,415 |
| 6 Bedrooms | $1,585 |
| 7 Bedrooms | $1,712 |
| 8 Bedrooms | $1,798 |
U.S. Census Bureau data (2024)
A skeptical investor might question whether the Fair Market Rent (FMR) of $920 for ZIP 51237 in fiscal year 2026 will sufficiently cover the mortgage on a home valued at $190,266. The FMR is a guideline set by HUD to determine payment standards for rental housing. However, it does not account for the variability in mortgage payments, which depend on interest rates and loan terms. Assuming a 30-year fixed-rate mortgage at an average rate of 4%, the monthly principal and interest payment on a $190,266 home would be approximately $922. This means that the FMR barely covers the mortgage payment, leaving little room for other expenses such as maintenance, insurance, and property taxes.
The objection regarding renter demand at 19.6% of the population is also valid. While this percentage indicates a portion of the residents who are renters, it does not provide a complete picture of the rental market's health. A low renter rate could imply limited demand, but it also depends on the vacancy rate and the number of units available. Without specific vacancy rate data, we cannot conclusively determine if the rental market is robust enough to sustain the FMR and support a profitable investment.
Lastly, an investor might wonder if the Housing Choice Voucher program can keep up with the market rents of $822. The voucher program aims to ensure that low-income families pay no more than 30% of their adjusted income for rent. However, the program's funding and distribution can vary widely. If the voucher amount falls below the market rent, landlords may face difficulties in filling units or may have to accept lower rents. It's important to note that the voucher program is subject to federal funding, and any changes in policy or budget could affect the ability to cover market rents.
In conclusion, while the FMR closely matches the expected mortgage payments, the relatively low renter demand and the uncertainty around voucher amounts pose risks. Investors should carefully consider these factors and possibly seek additional information on local vacancy rates and the stability of voucher funding before making investment decisions in ZIP 51237.
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.