Location: Van Buren County, IA | Metro: Jefferson 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 | $740 |
| 1 Bedroom | $750 |
| 2 Bedrooms | $980 |
| 3 Bedrooms | $1,170 |
| 4 Bedrooms | $1,480 |
| 5 Bedrooms | $1,717 |
| 6 Bedrooms | $1,923 |
| 7 Bedrooms | $2,077 |
| 8 Bedrooms | $2,181 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,170 | $213,792 | 0.55% | F |
U.S. Census Bureau data (2024)
A skeptical investor looking into ZIP code 52651 might have several concerns regarding the feasibility of investing in properties there, especially when considering the Section 8 program. Let's address these concerns directly.
Objection 1: Will Fair Market Rent (FMR) of $930 (metro FY 2026) cover the mortgage on a $188,937 home?
The FMR of $930 does not guarantee that it will cover the mortgage payments on a home valued at $188,937. To accurately determine if the FMR can cover the mortgage, we need to calculate the expected monthly mortgage payment based on typical interest rates and loan terms. For instance, a 30-year fixed-rate mortgage at an average rate of 4.5% would result in a monthly payment of approximately $940, which is slightly above the FMR. This suggests that landlords may face a shortfall in covering their mortgage payments solely through Section 8 rental income. However, it's important to note that property taxes and insurance costs are also factors, and these can be reimbursed under the Section 8 program, potentially closing the gap.
Objection 2: Is there enough renter demand at 18.4%?
The 18.4% renter-occupied housing rate in ZIP 52651 indicates a moderate level of demand for rental properties. While this percentage is not exceptionally high, it still represents a significant portion of the housing stock. The key here is understanding the local market dynamics. If the area has a growing population or employment opportunities, the demand for rentals could increase, making the 18.4% figure more promising. However, the data alone does not provide insights into future trends or the specific needs of the local rental market. Landlords should consider conducting further research on the local economy and demographics to gauge potential growth in rental demand.
Objection 3: Will vouchers keep pace with $815 market rents?
The voucher amount of $930 (metro FY 2026) exceeds the current market rent of $815, indicating that vouchers can indeed cover the market rents in ZIP 52651. This surplus provides a buffer for landlords, ensuring they receive adequate compensation even if market rents fluctuate. However, the sustainability of this trend depends on whether the market rents continue to rise and if the voucher amounts adjust accordingly. Given the current data, landlords can expect to be fairly compensated by vouchers in the short term. Long-term projections require monitoring both market rent trends and changes in voucher policies.
In conclusion, while the data provides some clarity on the financial aspects of investing in ZIP 52651 through the Section 8 program, it also highlights areas where further investigation is necessary. Landlords must weigh the benefits of steady rental income against the potential risks of financial shortfalls and conduct thorough due diligence on the local 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.