Location: Louisa 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 | $690 |
| 1 Bedroom | $710 |
| 2 Bedrooms | $930 |
| 3 Bedrooms | $1,130 |
| 4 Bedrooms | $1,290 |
| 5 Bedrooms | $1,496 |
| 6 Bedrooms | $1,676 |
| 7 Bedrooms | $1,810 |
| 8 Bedrooms | $1,901 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,130 | $190,752 | 0.59% | F |
| 4BR | $1,290 | $314,815 | 0.41% | F |
U.S. Census Bureau data (2024)
The Section 8 thesis for ZIP code 52738 revolves around the significant gap between the Fair Market Rent (FMR) and the actual market rent. For fiscal year 2024, the FMR is set at $860, while the Census American Community Survey (ACS) indicates that the average market rent is $643. This means there is a gap of $217, or approximately 33.7%, between what landlords can charge voucher tenants and the prevailing market rate.
Given that the FMR exceeds the market rent, landlords and small-portfolio investors should consider this an opportunity to increase their rental yields. Voucher tenants provide a guaranteed income stream that is higher than the typical market rent, making properties in this area particularly attractive for those seeking stable returns above the local average.
To anchor this analysis, we must consider the broader economic context of ZIP 52738. The area has a relatively low percentage of renters at 19.8%, suggesting a strong owner-occupied market. However, the median home value of $186,820 and median income of $80,385 indicate that housing costs could be a challenge for some residents, especially those relying on rental assistance programs.
In this scenario, the benefits of accepting Section 8 vouchers become clear. Landlords receive a higher rent payment compared to the open-market rates, which can significantly boost their cash flow and overall investment performance. Additionally, the security of a government-backed rent subsidy reduces the risk of vacancy and non-payment, common concerns for property owners.
However, it's important to note that the higher rent payments come with the requirement to maintain properties to certain standards and undergo regular inspections. Despite these obligations, the financial advantage of closing the gap between the FMR and market rent makes Section 8 participation a compelling strategy for maximizing returns in ZIP 52738.
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.