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 | $1,400 |
| 1 Bedroom | $1,580 |
| 2 Bedrooms | $1,920 |
| 3 Bedrooms | $2,510 |
| 4 Bedrooms | $2,810 |
| 5 Bedrooms | $3,260 |
| 6 Bedrooms | $3,651 |
| 7 Bedrooms | $3,943 |
| 8 Bedrooms | $4,140 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $2,510 | $364,796 | 0.69% | D |
| 4BR | $2,810 | $443,445 | 0.63% | D |
U.S. Census Bureau data (2024)
The analysis of ZIP code 54023 within the Minneapolis-St. Paul-Bloomington, MN-WI HUD Metro FMR Area reveals several key points that landlords and small-portfolio investors should consider.
First, let's examine if the rent math works. The Fair Market Rent (FMR) for ZIP 54023 in fiscal year 2024 is set at $1740. However, the Census American Community Survey (ACS) reports the market rent at $1,533. This indicates that the FMR is higher than the actual market rate, suggesting that landlords can potentially charge above the market average and still remain competitive within the HUD guidelines. For properties eligible under Section 8, the higher FMR provides a buffer for maintaining profitability.
Second, we assess the affordability of acquisitions. With a median home value of $411,162, purchasing properties in this area could be considered moderately expensive. Unfortunately, the data does not provide the number of days on market (DOM) or the percentage of homes that required price cuts before selling. This lack of information makes it challenging to gauge the current state of the housing market and how quickly or easily properties might be acquired. Despite these missing details, the median home value suggests that property purchases would require significant capital investment.
Third, we look at tenant demand. The population of ZIP 54023 stands at 4,620, with 19.6% of residents being renters. While the overall population is relatively small, the renter share provides a solid foundation for potential rental income. The demand for rental properties is likely to be steady given the percentage of residents who prefer renting over owning.
In conclusion, ZIP 54023 presents an opportunity where the rent math is favorable due to the higher FMR compared to the market rent. Acquisition costs are high, indicating that investors should carefully evaluate their budget and investment strategy. Tenant demand is present but limited by the small population size. Investors should focus on the quality of their properties and the ability to command rents slightly above the market average while adhering to Section 8 guidelines to ensure a steady stream of income.
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.