Location: Madison, WI | Metro: Madison, WI 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 | $1,150 |
| 1 Bedroom | $1,340 |
| 2 Bedrooms | $1,530 |
| 3 Bedrooms | $2,020 |
| 4 Bedrooms | $2,260 |
| 5 Bedrooms | $2,622 |
| 6 Bedrooms | $2,937 |
| 7 Bedrooms | $3,172 |
| 8 Bedrooms | $3,331 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,530 | $310,040 | 0.49% | F |
| 3BR | $2,020 | $446,506 | 0.45% | F |
| 4BR | $2,260 | $584,870 | 0.39% | F |
| 5BR | $2,622 | $777,722 | 0.34% | F |
U.S. Census Bureau data (2024)
The Section 8 thesis in ZIP code 53575, located in Oregon, Wisconsin, centers around the discrepancy between the Fair Market Rent (FMR) set at $1250 for fiscal year 2024 and the actual market rent, measured by the Zillow Rent Index (ZORI), which stands at $1875. This gap amounts to $625 per month, representing a significant 49.6% discount off the market rate.
Given that the FMR is lower than the market rent, landlords and small-portfolio investors must consider the cost implications of housing voucher tenants below open-market rates. The FMR is designed to cover a substantial portion of the rent, but it does not fully meet the market rent, leaving landlords to absorb the difference. In the case of Oregon, WI, this means landlords will receive $1250 instead of the market rate of $1875, leading to a potential loss of $625 per unit per month.
Oregon, WI has a median home value of $495,895 and a median household income of $107,885. With 20.5% of residents being renters, the demand for rental properties is steady. However, the financial burden of renting below market rates can be mitigated through the long-term stability provided by government-backed vouchers. Despite the initial shortfall, the guaranteed payment structure and lower turnover rates associated with voucher tenants can offer a consistent cash flow and reduced management costs, making it a strategic yield play for some investors.
To summarize, the $625 monthly gap, or 49.6% discount, between the FMR and the ZORI in ZIP 53575 presents a challenge for landlords. While the market rent is higher, the benefits of having stable, government-subsidized tenants can outweigh the immediate financial shortfall, particularly in a context where the median income and home values suggest a robust local economy.
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.