Location: Minneapolis-St. Paul-Bloomington, MN | Metro: Minneapolis-St. Paul-Bloomington, MN-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 | $1,120 |
| 1 Bedroom | $1,270 |
| 2 Bedrooms | $1,540 |
| 3 Bedrooms | $2,040 |
| 4 Bedrooms | $2,280 |
| 5 Bedrooms | $2,645 |
| 6 Bedrooms | $2,962 |
| 7 Bedrooms | $3,199 |
| 8 Bedrooms | $3,359 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,540 | $269,487 | 0.57% | F |
| 3BR | $2,040 | $321,406 | 0.63% | D |
| 4BR | $2,280 | $365,353 | 0.62% | D |
U.S. Census Bureau data (2024)
ZIP 54002, located in Baldwin, WI, within the Minneapolis-St. Paul-Bloomington, MN-WI HUD Metro FMR Area, serves as a strong cash-flow anchor for any Section 8 portfolio strategy. The Federal Market Rent (FMR) for the area in fiscal year 2024 is set at $1380, which exceeds the average market rent of $1,167. This spread ensures that landlords can command higher rents through Section 8 vouchers, thereby securing better cash flow compared to the local rental market.
The median home value in ZIP 54002 stands at $337,591. Despite this relatively high home value, the FMR is significantly above the market rent, indicating a robust opportunity for landlords to generate steady income. This ZIP code's alignment with Section 8 guidelines means that landlords can reliably count on a consistent source of rental income without the volatility often associated with market-rate rentals.
While ZIP 54002 does not present a significant appreciation play due to the lack of data on price-cut shares and days on market (DOM), it excels as a diversifier. With a 21.9% renter share, the area has a notable portion of residents who rely on rental housing, making it a stable segment of the housing market. Additionally, the median income of $88,275 suggests a financially secure tenant base, reducing the risk of default and increasing the likelihood of long-term tenancy.
In conclusion, ZIP 54002 is best suited as a cash-flow anchor within a Section 8 portfolio strategy. The $213 spread between the FMR and market rent guarantees a reliable and higher income stream, while the diversified tenant base ensures stability and reduces financial risks. Landlords and small-portfolio investors should consider this ZIP code for its ability to provide a solid foundation for their investment strategies.
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.