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: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,530 | $335,494 | 0.46% | F |
| 3BR | $2,020 | $385,221 | 0.52% | F |
| 4BR | $2,260 | $426,083 | 0.53% | F |
U.S. Census Bureau data (2024)
The HUD Fair Market Rent (FMR) for ZIP code 53714 in Madison, WI, for fiscal year 2024 is set at $1,270. This figure represents the maximum amount that a landlord can charge for a Section 8 voucher tenant in this area. In contrast, the market rent, measured by Zillow's ZORI index, stands at $1,467. Given these numbers, voucher tenants would typically generate negative cash flow for landlords unless they own premium units that command higher rents.
To put this into perspective, the median home value in ZIP 53714 is $374,561. Using this, we can calculate the rent-to-price ratio, which comes out to be approximately 0.39%. This low ratio suggests that rental income alone might not cover the mortgage and maintenance costs for typical properties, reinforcing the need for premium units to achieve positive cash flow.
The dynamics between renting and buying in this area are further highlighted by the lack of available data on median days on market (DOM) and the percentage of homes that require price cuts. However, given the high median home value and relatively lower FMR compared to market rent, it's evident that the buy side is less favorable than the rent side. Landlords and small-portfolio investors should focus on securing properties that can command rents above the FMR to ensure profitability.
The strongest angle for investors in ZIP 53714 remains stability. Despite the challenges posed by the FMR, the consistent demand for housing and the robust local economy provide a solid foundation for long-term investment. Stability ensures that even if immediate cash flow is tight, the overall value of the investment is secure and likely to appreciate over time.
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.