Location: Iowa City, IA | Metro: Cedar Rapids, 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 | $800 |
| 1 Bedroom | $870 |
| 2 Bedrooms | $1,090 |
| 3 Bedrooms | $1,510 |
| 4 Bedrooms | $1,820 |
| 5 Bedrooms | $2,111 |
| 6 Bedrooms | $2,364 |
| 7 Bedrooms | $2,553 |
| 8 Bedrooms | $2,681 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,090 | $207,129 | 0.53% | F |
| 3BR | $1,510 | $376,326 | 0.4% | F |
| 4BR | $1,820 | $420,187 | 0.43% | F |
U.S. Census Bureau data (2024)
To integrate ZIP 52227, which includes parts of Ely and Iowa City in Iowa, into a Section 8 portfolio strategy, one must consider the financial metrics specific to this area. The Fair Market Rent (FMR) for a one-bedroom apartment in ZIP 52227 for fiscal year 2024 is set at $1020. This is compared to the market rent of $897, indicating a positive spread of $123 per unit. This spread suggests that properties in ZIP 52227 can serve as a cash-flow anchor within a Section 8 portfolio.
The median home value in ZIP 52227 is $363,989, reflecting a stable housing market. However, the primary focus for Section 8 investments should be on rental properties, given the program's nature. With a renter share of 15.9%, there is a notable segment of the population that relies on rental housing, making this area suitable for rental investments.
The median income in the area stands at $120,230, which is relatively high and indicates a strong economic base capable of supporting higher rents through Section 8 subsidies. While appreciation plays and diversification are important aspects of any investment strategy, the clear advantage in ZIP 52227 lies in its potential as a cash-flow anchor. The guaranteed rental income from the Section 8 program, coupled with the positive spread over market rents, ensures steady and predictable returns on investment.
Furthermore, the lack of data on price-cut shares and days on market (DOM) suggests that the market in ZIP 52227 is less volatile and more consistent, aligning well with the goal of maintaining a stable cash flow. Landlords and small-portfolio investors should focus on securing properties that qualify for the Section 8 program to leverage the higher FMR rates and ensure a reliable income stream.
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.