Section 8 Fair Market Rent (FMR) for ZIP 53562 - 2027

Location: Madison, WI | Metro: Madison, WI HUD Metro FMR Area

Investment Score for ZIP 53562

Monthly Rent (2BR)

$1,630

Median Price (2BR)

$324,331

1% Rule

0.5%

Annual Yield

6.03%

Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)

FY 2027 Fair Market Rent Rates

Unit Size	Monthly FMR
Studio	$1,250
1 Bedroom	$1,430
2 Bedrooms	$1,630
3 Bedrooms	$2,130
4 Bedrooms	$2,360
5 Bedrooms	$2,738
6 Bedrooms	$3,067
7 Bedrooms	$3,312
8 Bedrooms	$3,478

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
1BR	$1,430	$250,110	0.57%	F
2BR	$1,630	$324,331	0.5%	F
3BR	$2,130	$569,953	0.37%	F
4BR	$2,360	$761,969	0.31%	F
5BR	$2,738	$1,046,837	0.26%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

Population

29,790

Median Household Income

$101,381

Housing Units

13,604

Renter Percentage

46.6%

Occupancy Rate

96.5%

Renter Occupied

6,120

A decision tree for whether to buy in ZIP 53562 (Middleton, WI) for Section 8 purposes involves several key considerations based on the Fair Market Rent (FMR), debt service coverage, and rental market dynamics.

1) Does the FMR of $1370 cover debt service on a $618,453 property?

No: The FMR of $1370 does not provide sufficient income to cover the debt service on a property valued at $618,453. Debt service typically includes mortgage payments, property taxes, insurance, and maintenance costs. At this price point, a landlord would likely need a higher rent to ensure positive cash flow.

2) Is the market rent ($1,650 ZORI) above, at, or below the FMR?

It Depends: The market rent of $1,650 is above the FMR of $1370. This indicates that landlords could potentially command higher rents than what is covered under Section 8. However, this also means that the pool of potential tenants who qualify for Section 8 assistance might be limited due to the lower FMR cap.

3) Are 46.6% of residents renters, and is the N/A-day DOM (Days on Market) indicative of enough demand?

Yes: With 46.6% of residents being renters, there is a substantial demand for rental properties. However, the lack of data on Days on Market (DOM) makes it challenging to assess the speed at which properties are rented out. Despite this, the high percentage of renters suggests a robust market presence for rental units.

To summarize, while the market rent exceeds the FMR, making it less favorable for pure Section 8 investments due to the lower rent ceiling, the significant portion of residents who are renters indicates strong overall demand. Landlords must weigh these factors carefully. If they seek to exclusively target Section 8 tenants, the FMR may not support the purchase of a $618,453 property. However, if they are open to a mixed portfolio approach, combining Section 8 with market-rate rentals, the high market rent and substantial rental population make ZIP 53562 a viable option.

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.