Location: Jefferson County, IA | Metro: Washington County, 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 | $740 |
| 1 Bedroom | $750 |
| 2 Bedrooms | $980 |
| 3 Bedrooms | $1,170 |
| 4 Bedrooms | $1,300 |
| 5 Bedrooms | $1,508 |
| 6 Bedrooms | $1,689 |
| 7 Bedrooms | $1,824 |
| 8 Bedrooms | $1,915 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $980 | $144,616 | 0.68% | D |
| 3BR | $1,170 | $175,572 | 0.67% | D |
| 4BR | $1,300 | $229,240 | 0.57% | F |
U.S. Census Bureau data (2024)
The ZIP code 52540 is situated in a rural part of Iowa. This area is characterized by a modest population of 1,088 residents, indicating a tight-knit community where familiarity and local connections are key. With 22.5% of the population renting their homes, there is a notable but not overwhelming demand for rental properties. The median household income stands at $55,000, suggesting a middle-class community that is financially stable but not affluent. The median home value in this region is $156,725, reflecting a relatively affordable housing market.
Moving into the specifics of rental economics, the Fair Market Rent (FMR) for ZIP 52540 in fiscal year 2024 is set at $860. In contrast, the market rent as reported by the Census Bureau's American Community Survey is $681. This disparity between the FMR and the actual market rent presents an opportunity for hands-off Section 8 operators who can capitalize on the government-subsidized rent rates without having to actively manage the property's value beyond compliance with housing standards.
However, the difference also suggests potential for a hands-on value-add buyer. By investing in property improvements and increasing the market appeal, a savvy landlord could potentially command rents closer to the FMR. This approach requires a commitment to enhancing property value and navigating the complexities of Section 8 regulations while also understanding the local rental market dynamics.
In summary, ZIP 52540 offers a balanced environment for both hands-off and hands-on Section 8 investors. Hands-off operators can benefit from the higher subsidized rent rates compared to the market, while value-add buyers have the opportunity to improve properties and increase their profitability. The decision between these strategies should be informed by an investor’s goals, experience, and willingness to engage with the local community and market conditions.
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.