Section 8 Fair Market Rent (FMR) for ZIP 54701 - 2027

Investment Score for ZIP 54701

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	$1,040
1 Bedroom	$1,040
2 Bedrooms	$1,290
3 Bedrooms	$1,740
4 Bedrooms	$1,740
5 Bedrooms	$2,018
6 Bedrooms	$2,260
7 Bedrooms	$2,441
8 Bedrooms	$2,563

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
2BR	$1,290	$256,866	0.5%	F
3BR	$1,740	$319,185	0.55%	F
4BR	$1,740	$402,721	0.43%	F
5BR	$2,018	$532,233	0.38%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 54701 (Eau Claire, WI) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 54701, as set by HUD for 2026, is $1200 for a two-bedroom unit. This amount represents 19.4% of the median household income in Eau Claire, which stands at $74,361. The FMR is designed to ensure that rental housing is affordable for low-income families, but it can also serve as a benchmark for landlords who participate in the Section 8 program. To understand how FMR compares to actual rents, we need to consider the price-to-FMR ratio, which is reported at 17.5x for a two-bedroom unit. This means that the median home value on Zillow for a two-bedroom property is approximately $251,390, significantly higher than the FMR. However, the FMR specifically targets rental prices, so let’s focus on that aspect. If the actual rent for a two-bedroom unit is close to the FMR, then voucher holders would face minimal constraints in finding suitable housing. But if actual rents exceed the FMR, voucher holders might struggle to find units within their budget. Given the high price-to-FMR ratio, it is likely that many rental units in Eau Claire are priced above the FMR. This could create challenges for voucher holders, who may have difficulty finding properties that accept their vouchers due to the limited number of units available at or below the FMR. Landlords who choose to participate in the Section 8 program must be willing to accept a lower rent compared to the market average, which could affect their willingness to do so. #### Affordability & Renter Profile Eau Claire has a population of 43,014, with 42.6% of residents being renters. This indicates a significant demand for rental housing, making it a competitive market for tenants. The occupancy rate of 97.4% further supports this notion, suggesting that there is little vacancy and a strong tenant base. With a median household income of $74,361, the affordability of rental housing becomes a critical issue. The FMR for a two-bedroom unit at $1200 is only 19.4% of the median income, which is relatively low. This implies that the cost of renting a two-bedroom unit is manageable for most households, even those receiving Section 8 assistance. However, the high price-to-FMR ratio suggests that many units are priced well above the FMR, potentially pricing out lower-income families unless they can secure a Section 8 voucher. The tight market conditions mean that landlords have leverage in setting rental prices, which could lead to higher rents. This could make it difficult for voucher holders to find units that accept their vouchers, especially if landlords are unwilling to rent below market rates. The competition for rental housing could also drive up the cost of living for all residents, not just those relying on Section 8 assistance. #### Investor Angle From an investor perspective, the ZIP code 54701 presents both opportunities and challenges. The FMR for a two-bedroom unit is $1200, which is significantly lower than the median home value on Zillow of $251,390. However, the price-to-FMR ratio of 17.5x indicates that the market rents are much higher than the FMR. This high ratio suggests that the market is overpriced relative to the FMR, which could be beneficial for investors who are not strictly tied to the FMR but can still attract tenants willing to pay market rates. However, for investors focusing solely on Section 8 vouchers, the situation is less favorable. They would need to ensure that their rental units are priced at or below the FMR to attract voucher holders, which could result in lower cash flow compared to market-rate rentals. The investment grade for this ZIP code would depend on the investor’s strategy. For those looking to capitalize on the high market rents, the investment could be considered positive. However, for those targeting the Section 8 market, the investment grade would be lower due to the potential for reduced cash flow and the challenge of finding tenants willing to accept the lower rents associated with FMR. #### Specific Actionable Insights 1. **Focus on Units Below FMR**: Investors should consider acquiring or developing rental units that are priced at or below the FMR. This would allow them to tap into the Section 8 market, which comprises a significant portion of the local renters. For instance, a two-bedroom unit priced at $1200 or less would be attractive to voucher holders, ensuring a steady stream of tenants. 2. **Diversify Tenant Base**: Given the high price-to-FMR ratio, investors should diversify their tenant base to include both market-rate and Section 8 tenants. This approach can help balance the lower cash flow from Section 8 units with higher cash flow from market-rate units. For example, a mix of units priced between $1200 and $251,390 could provide a more stable financial outlook. 3. **Engage with Local Housing Authorities**: To maximize the chances of securing tenants with Section 8 vouchers, investors should engage with local housing authorities. Building relationships with these entities can provide valuable insights into the availability of vouchers and the preferences of voucher holders. Additionally, understanding the local regulations and requirements for participating in the Section 8 program can help investors navigate the process more effectively. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 54701 is to **Skip**. The high price-to-FMR ratio indicates that the market is overpriced relative to the FMR, making it challenging to find units that can be rented at or below the FMR. While there is a significant demand for rental housing, the tight market conditions and high rents suggest that landlords may prefer to rent at market rates rather than accept Section 8 vouchers, which would limit the potential for cash flow and profitability. However, for investors willing to diversify their tenant base and include both market-rate and Section 8 tenants, there may be opportunities to achieve positive cash flow. These investors should carefully evaluate the local market dynamics and consider engaging with local housing authorities to better understand the landscape and improve their chances of success.

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.