Section 8 Fair Market Rent (FMR) for ZIP 52402 - 2027

Investment Score for ZIP 52402

Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)

FY 2027 Fair Market Rent Rates

Unit Size	Monthly FMR
Studio	$810
1 Bedroom	$890
2 Bedrooms	$1,170
3 Bedrooms	$1,620
4 Bedrooms	$1,960
5 Bedrooms	$2,274
6 Bedrooms	$2,547
7 Bedrooms	$2,751
8 Bedrooms	$2,889

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
1BR	$890	$79,177	1.12%	B
2BR	$1,170	$148,134	0.79%	D
3BR	$1,620	$208,669	0.78%	D
4BR	$1,960	$296,148	0.66%	D
5BR	$2,274	$344,582	0.66%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 52402 (Cedar Rapids, IA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for Cedar Rapids, specifically ZIP code 52402, is set by HUD for 2026. The FMRs are as follows: - 0BR: $780 - 1BR: $860 - 2BR: $1130 - 3BR: $1570 - 4BR: $1900 Comparing these figures to actual rents, we see that the Zillow median price for a 2BR unit is $144,583. However, the price-to-FMR ratio for a 2BR unit is 10.7x, indicating that the median home value is significantly higher than the rent FMR. This suggests that the actual rental market may be above the FMR levels, creating constraints for voucher holders. For instance, a voucher holder might find it challenging to secure a 2BR unit at the FMR rate of $1130 when the average market rent could be much higher. #### Affordability & Renter Profile ZIP code 52402 has a population of 42,938, with 32.7% of residents being renters. The occupancy rate is high at 93.4%, which indicates a tight rental market where demand exceeds supply. Given the median household income of $73,439, the affordability of housing is a critical concern. A 2BR unit at the FMR rate of $1130 represents 18.5% of the median income, which is within the affordable range for many households. However, the high price-to-FMR ratio suggests that the actual rental prices are likely to be higher, making it difficult for low-income families to find suitable housing without assistance. #### Investor Angle From an investor perspective, the ZIP code 52402 appears to have potential for positive cash flow if properties are rented at or near the FMR rates. However, the reality is that the actual rental market prices are likely to be higher due to the tight market conditions. The Zillow median price for a 2BR unit is $144,583, which is approximately 10.7 times the FMR of $1130. This implies that the average monthly mortgage payment on a property purchased at this price would be around $1,130 per month (assuming a 30-year fixed-rate mortgage at a typical interest rate), which aligns with the FMR but may not cover all expenses such as maintenance, utilities, and property taxes. Given the high occupancy rate and significant percentage of renters, there is a strong demand for rental units. However, the challenge lies in finding properties that can be rented at or below the FMR rates while still generating positive cash flow. The investment grade in this area would depend on the ability to secure tenants willing to pay the FMR rates and the overall cost structure of owning and maintaining a rental property. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, smaller units (0BR and 1BR) may offer better opportunities for positive cash flow. The FMR for a 0BR unit is $780, and for a 1BR unit, it is $860. These lower FMRs can help investors manage costs more effectively and potentially attract Section 8 voucher holders who are looking for affordable options. 2. **Consider Location-Specific Strategies**: Within ZIP code 52402, certain neighborhoods may have lower actual rental prices compared to others. Investors should conduct thorough neighborhood analyses to identify areas where the actual rental prices are closer to the FMRs. This will increase the likelihood of attracting Section 8 voucher holders and ensure a steady stream of tenants. 3. **Engage with Local Housing Authorities**: Building relationships with local housing authorities can provide valuable insights into the availability and usage of Section 8 vouchers. This can help investors understand the demand for subsidized housing and potentially secure long-term leases with guaranteed payments. #### Bottom Line For Section 8-focused investors, ZIP code 52402 presents a mixed picture. While there is a strong demand for rental units and a significant portion of the population are renters, the high price-to-FMR ratio suggests that the actual rental market may be above the FMR levels. Therefore, the recommendation is to **Hold** on investments in this ZIP code unless you can find properties that are priced at or below the FMRs and are located in areas with lower actual rental prices. Investors should focus on smaller units and engage with local housing authorities to maximize their chances of success in this market.

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.