Section 8 Fair Market Rent (FMR) for ZIP 52404 - 2027

Investment Score for ZIP 52404

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	$800
1 Bedroom	$870
2 Bedrooms	$1,080
3 Bedrooms	$1,500
4 Bedrooms	$1,810
5 Bedrooms	$2,100
6 Bedrooms	$2,352
7 Bedrooms	$2,540
8 Bedrooms	$2,667

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	$870	$76,198	1.14%	B
2BR	$1,080	$158,949	0.68%	D
3BR	$1,500	$210,806	0.71%	D
4BR	$1,810	$290,729	0.62%	D
5BR	$2,100	$378,227	0.56%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 52404 (Cedar Rapids, IA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for Cedar Rapids, IA (ZIP 52404), as set by HUD for 2026, is $1080 for a two-bedroom unit. This figure represents 20.9% of the median household income of $61,870, indicating that it is a relatively affordable rent for the area. However, the actual rental market dynamics need to be considered to understand how these figures translate into real-world scenarios. To determine if the FMR aligns with actual rents, we can look at the occupancy rate and the percentage of renters in the population. With an occupancy rate of 90.1%, there is a high demand for housing units, suggesting that rents might be higher than the FMR. Additionally, 33.9% of the population are renters, which further indicates a significant portion of the community relies on rental properties. The FMR serves as a guideline for landlords accepting Section 8 vouchers, but the actual rents charged could exceed these levels due to market conditions. Landlords who accept Section 8 vouchers are constrained by the FMR limits, meaning they cannot charge more than $1080 for a two-bedroom unit. This constraint can be a challenge in a market where the median Zillow price for a two-bedroom home is $149,483, indicating a potentially tight rental market. #### Affordability & Renter Profile The median household income in ZIP 52404 is $61,870, and the FMR for a two-bedroom unit is $1080, which is 20.9% of the median income. This suggests that the typical renter in this area spends a substantial portion of their income on housing. Given that 33.9% of the population are renters, it is likely that many residents are cost-burdened, spending over 30% of their income on rent. The occupancy rate of 90.1% points to a robust demand for rental units, indicating that the market is relatively tight. This tightness can drive up actual rents beyond the FMR, making it difficult for voucher holders to find suitable housing. The high demand also implies that there is little excess supply, which can benefit landlords who are willing to accept Section 8 vouchers by ensuring steady occupancy rates. #### Investor Angle From an investor perspective, the key question is whether the FMR provides a positive cash flow when compared to the median property values and other costs. The median Zillow price for a two-bedroom home is $149,483, and the price-to-FMR ratio is 11.5x. This means that a two-bedroom home priced at $149,483 would generate approximately $1080 per month in rent, according to the FMR. To assess the investment potential, we need to consider the total monthly expenses, including mortgage payments, maintenance, insurance, and property taxes. Assuming a 20-year fixed-rate mortgage at 4.5% interest, the monthly payment on a $149,483 property would be around $900. Adding in estimated monthly costs for maintenance ($100), insurance ($50), and property taxes ($100), the total monthly expenses would be about $1150. Given that the FMR is $1080, this would result in a negative cash flow of $70 per month. Therefore, relying solely on the FMR would not provide a positive cash flow for investors. However, if investors can secure tenants paying slightly above the FMR, the cash flow could become positive. For example, charging $1200 per month would yield a positive cash flow of $50 per month. #### Investment Grade Considering the negative cash flow based on the FMR alone, the investment grade for properties in ZIP 52404 would be moderate to low. Investors would need to carefully evaluate the potential for securing tenants who can pay above the FMR to achieve positive cash flow. Additionally, the high occupancy rate and significant number of renters suggest that there is a strong demand for rental units, which can help ensure consistent occupancy and reduce vacancy risks. #### Specific Actionable Insights 1. **Rent Premium Strategy**: Investors should aim to charge slightly above the FMR to ensure positive cash flow. For instance, charging $1200 for a two-bedroom unit would provide a modest positive cash flow of $50 per month. This strategy requires careful negotiation with local housing authorities and understanding the willingness of voucher holders to pay additional rent. 2. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investing in smaller units such as one-bedroom or studio apartments might be more financially viable. The FMR for a one-bedroom unit is $830, and the median Zillow price for a one-bedroom home is likely lower than the two-bedroom price. This could improve the cash flow situation for investors. 3. **Community Engagement**: Engaging with the local community and understanding the needs of voucher holders can help landlords position their properties effectively. For example, offering amenities like laundry facilities, parking, and proximity to public transportation can make a property more attractive to Section 8 tenants. #### Bottom Line Based on the provided data, the recommendation for Section 8-focused investors in ZIP 52404 is to **Hold**. While the market presents challenges due to the negative cash flow based on FMR alone, the strong demand for rental units and the potential to charge slightly above the FMR can make it a viable investment. However, investors should proceed cautiously and focus on smaller units or properties with added value propositions to ensure positive cash flow and successful tenancy. --- This analysis provides a detailed overview of the rental market dynamics, affordability, and investment potential in ZIP code 52404, Cedar Rapids, IA, using the provided data. It highlights the importance of strategic pricing and community engagement for investors interested in Section 8 properties.

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.