Location: Emmet County, IA | Metro: Dickinson 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 | $750 |
| 1 Bedroom | $790 |
| 2 Bedrooms | $990 |
| 3 Bedrooms | $1,260 |
| 4 Bedrooms | $1,310 |
| 5 Bedrooms | $1,520 |
| 6 Bedrooms | $1,702 |
| 7 Bedrooms | $1,838 |
| 8 Bedrooms | $1,930 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $990 | $104,250 | 0.95% | C |
| 3BR | $1,260 | $155,327 | 0.81% | C |
| 4BR | $1,310 | $207,253 | 0.63% | D |
| 5BR | $1,520 | $268,326 | 0.57% | F |
U.S. Census Bureau data (2024)
When considering whether to purchase a property in ZIP code 51334 (Estherville, IA) for Section 8 investment, follow this decision tree:
Step 1: Debt Service Coverage Ratio (DSCR)
The Fair Market Rent (FMR) for the metro area in fiscal year 2026 is set at $960. This amount must cover the debt service on a property valued at $138,988. To determine if this is feasible, calculate the DSCR using the FMR and typical financing terms for such a property. If the DSCR is greater than 1, meaning the rental income exceeds the debt service, then proceed to the next step. Otherwise, do not invest here as the FMR does not sufficiently cover the costs.
Step 2: Market Rent Comparison
The Census ACS reports the average market rent in Estherville, IA at $755. Compare this figure to the FMR of $960. Since the market rent is below the FMR, you can expect that Section 8 tenants will be able to afford the rent without significant out-of-pocket expenses, which is beneficial for maintaining occupancy rates.
Step 3: Rental Demand Analysis
In Estherville, 22.6% of residents are renters. However, the data does not provide the number of days on the market (DOM) for vacant rental properties. Without this information, it's challenging to assess the strength of rental demand. If the DOM is low, indicating quick leasing times, then there is likely sufficient demand to support a Section 8 property. Conversely, if DOM is high, it suggests a slower rental market, which could make it harder to fill vacancies promptly.
Decision Outcome:
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.