Location: Lee County, IA | Metro: Lee County, IA
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 | $680 |
| 1 Bedroom | $750 |
| 2 Bedrooms | $980 |
| 3 Bedrooms | $1,300 |
| 4 Bedrooms | $1,450 |
| 5 Bedrooms | $1,682 |
| 6 Bedrooms | $1,884 |
| 7 Bedrooms | $2,035 |
| 8 Bedrooms | $2,137 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $750 | $43,095 | 1.74% | A+ |
| 2BR | $980 | $84,210 | 1.16% | B |
| 3BR | $1,300 | $137,573 | 0.94% | C |
| 4BR | $1,450 | $156,344 | 0.93% | C |
| 5BR | $1,682 | $186,397 | 0.9% | C |
U.S. Census Bureau data (2024)
In ZIP code 52627, which encompasses Fort Madison, Iowa, and parts of Lee County, understanding the economics of Section 8 housing can help landlords make informed decisions about participating in the program. For a two-bedroom apartment, the SAFMR (Small Area Fair Market Rent) is set at $1,010 per month for fiscal year 2026. This figure is specific to this ZIP code and reflects the maximum amount that the Housing Choice Voucher program will pay towards rent.
The local market rent for a similar unit, according to Census ACS data, averages around $822 per month. This indicates that the SAFMR is higher than the average market rent, potentially offering an incentive for landlords to accept vouchers.
A Section 8 voucher works by covering the difference between what a tenant can afford and the rent of the unit. The tenant's portion is typically calculated as 30% of their adjusted monthly income. For example, if a tenant has an adjusted monthly income of $1,500, they would contribute approximately $450 towards rent. The voucher would then cover the remaining amount up to the SAFMR of $1,010. In this case, the voucher would pay $560, making the total rental payment $1,010.
Utility allowances are also factored into the equation but are separate from the rent reimbursement. These allowances vary based on the size of the unit and the region. For a two-bedroom unit in ZIP 52627, the utility allowance might be around $300 per month, though this exact amount should be verified with the local housing authority. The utility allowance is paid directly to the tenant to cover electricity, gas, water, and other essential services.
Given the SAFMR of $1,010 and the local market rent of $822, landlords accepting vouchers in ZIP 52627 can expect a surplus of $188 per month on average. This means that even with the tenant contributing their portion and the voucher covering the rest, landlords receive more than the typical market rent for a two-bedroom unit.
To illustrate further, consider a landlord with a two-bedroom unit renting for $900 per month. If the tenant contributes $450 (30% of a $1,500 monthly income), the voucher would cover the remaining $550 to reach the SAFMR limit of $1,010. Therefore, the landlord receives the full $900 rental price, plus the tenant's contribution and the voucher reimbursement, totaling $1,000, which is $100 above the SAFMR and $88 above the average market rent.
In conclusion, landlords in ZIP 52627 who participate in the Section 8 program can expect a surplus when renting out a two-bedroom unit, given the SAFMR exceeds the local market rent. This economic benefit can offset some of the administrative complexities associated with the program, making it a viable option for securing long-term, stable tenants.
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.