Location: Benton County, 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 | $850 |
| 1 Bedroom | $930 |
| 2 Bedrooms | $1,220 |
| 3 Bedrooms | $1,690 |
| 4 Bedrooms | $2,040 |
| 5 Bedrooms | $2,366 |
| 6 Bedrooms | $2,650 |
| 7 Bedrooms | $2,862 |
| 8 Bedrooms | $3,005 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $930 | $121,299 | 0.77% | D |
| 2BR | $1,220 | $165,201 | 0.74% | D |
| 3BR | $1,690 | $215,031 | 0.79% | D |
| 4BR | $2,040 | $267,779 | 0.76% | D |
| 5BR | $2,366 | $344,146 | 0.69% | D |
U.S. Census Bureau data (2024)
The Section 8 market in ZIP code 52405, located in Cedar Rapids, IA, within the Linn County and Benton County HUD Metro FMR Area, presents a balanced opportunity for real estate investors. The HUD Fair Market Rent (FMR) for the area is set at $1070 for the fiscal year 2024. In comparison, the market rent, measured by Zillow's ZORI index, stands at $1165. This indicates that voucher tenants will generate a marginal positive cash flow at the FMR rate, with a slight shortfall when compared to market rents.
To derive the rent-to-price ratio, we consider the median home value in the area, which is $202,188. Using the HUD FMR of $1070, the annual rent is approximately $12,840. Therefore, the rent-to-price ratio is roughly 6.35%, calculated as ($12,840 / $202,188) * 100. This ratio suggests that rental income is modest relative to the cost of property, but still provides a reasonable return on investment for those willing to manage Section 8 properties.
The market conditions also show a 21-day median Days on Market (DOM), indicating a relatively quick turnover for rentals. Additionally, the price-cut share is at 0.2%, suggesting that landlords do not typically need to reduce their asking rents to attract tenants. These factors imply that the rent-vs-buy dynamics favor landlords, as potential buyers are less likely to outbid investors for rental properties.
Investors should note that while the cash flow from Section 8 properties is marginal, the stability provided by government-backed rental assistance can be a significant advantage. With the HUD FMR closely aligned to market rents, there is little risk of vacancy due to the guaranteed income stream. Furthermore, the consistent demand for affordable housing in this region ensures long-term stability, making it an attractive option for those prioritizing steady returns over high appreciation potential.
The strongest angle for investors in this market is stability, given the reliable demand for affordable housing and the secure nature of government-subsidized rents.
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.