Section 8 Fair Market Rent (FMR) for ZIP 54956 - 2027

Investment Score for ZIP 54956

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	$1,050
1 Bedroom	$1,080
2 Bedrooms	$1,380
3 Bedrooms	$1,860
4 Bedrooms	$1,900
5 Bedrooms	$2,204
6 Bedrooms	$2,468
7 Bedrooms	$2,665
8 Bedrooms	$2,798

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	$1,380	$240,564	0.57%	F
3BR	$1,860	$325,763	0.57%	F
4BR	$1,900	$423,563	0.45%	F
5BR	$2,204	$525,597	0.42%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 54956 (Neenah, WI) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for Neenah, WI, in ZIP code 54956, is set at $1310 for a two-bedroom unit in 2026. This amount represents 18.3% of the median household income of $85,869, indicating that it is reasonably aligned with the local economic conditions. However, the actual rental market dynamics paint a different picture. The Zillow median price for a two-bedroom unit is $235,874, which translates to a monthly rent of approximately $1500 based on typical mortgage rates and property management costs. This means that the actual rents are significantly higher than the FMR, creating a gap between what voucher holders can afford and what landlords are charging. Given these figures, voucher holders face significant constraints. For instance, a two-bedroom unit priced at $1500 would exceed the FMR by about $190 per month, making it challenging for tenants to find affordable housing. Landlords who wish to participate in the Section 8 program must adhere to the FMR guidelines, which could limit their profitability compared to market rates. #### Affordability & Renter Profile Neenah has a population of 46,567, with 30.8% of residents being renters. This indicates a substantial rental market, but the occupancy rate of 96.4% suggests that the market is relatively tight. With a high occupancy rate, there is less availability of units, leading to increased competition among renters. Additionally, the median household income of $85,869 implies that many residents have the financial capacity to afford market-rate rents, further tightening the rental market for those relying solely on vouchers. The affordability challenge is evident when considering that the FMR for a three-bedroom unit is $1760, while the four-bedroom unit is $1880. These figures represent only a small fraction of the median income, indicating that even larger units are relatively affordable for the average resident. However, for those with Section 8 vouchers, the cost of living in a larger unit could be prohibitive due to the limited budget available through the program. #### Investor Angle From an investor perspective, the ZIP code 54956 presents both opportunities and challenges. The FMR for a two-bedroom unit is $1310, which is significantly lower than the actual market rent of around $1500. This discrepancy creates a potential for cash flow if investors can secure properties at or near the FMR level. However, the price-to-FMR ratio of 15.0x indicates that purchasing properties at the FMR level is highly unlikely, given the median home value of $235,874. To determine the investment grade, we need to consider the potential for cash flow and the demand for Section 8 units. Given the high occupancy rate and the significant number of renters, there is likely a strong demand for affordable housing. However, the tight market and high purchase prices suggest that investors will need to carefully evaluate the potential returns. Assuming a conservative estimate of 1% of the population using Section 8 vouchers, this equates to approximately 1430 households. If an investor were to purchase a two-bedroom unit at the median home value and rent it out at the FMR, the monthly rent would be $1310. Based on typical mortgage rates, the monthly payment for a $235,874 property would be around $1100, leaving a net cash flow of $210 per month. This scenario would be marginally profitable but would require careful management to ensure long-term viability. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors should focus on acquiring smaller units such as one-bedroom or studio apartments. The FMR for a one-bedroom unit is $1010, which is more closely aligned with the potential rental income. This strategy would help mitigate the risk associated with the high purchase prices and ensure a more stable cash flow. 2. **Seek Out Subsidies and Incentives**: Investors should explore additional subsidies and incentives available for affordable housing projects. Local government programs or federal initiatives might provide grants or tax breaks that can offset the initial purchase costs and make the investment more attractive. For example, a subsidy that reduces the effective purchase price of a property could bring the price-to-FMR ratio closer to a more manageable level. 3. **Engage with Community Partnerships**: Building relationships with local community organizations and housing authorities can provide valuable insights into the needs of voucher holders and potential areas for growth. These partnerships can also facilitate access to resources and support systems that can enhance the success of the investment. #### Bottom Line Based on the provided data, the recommendation for Section 8-focused investors in ZIP code 54956 is to **Hold**. While there is a strong demand for affordable housing, the high purchase prices and the significant gap between FMR and market rents make it challenging to achieve positive cash flow without additional subsidies or strategic partnerships. Investors should proceed cautiously and consider focusing on smaller units or seeking out additional financial support to improve the feasibility of their investments.

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.