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 | $1,170 |
| 1 Bedroom | $1,330 |
| 2 Bedrooms | $1,610 |
| 3 Bedrooms | $2,100 |
| 4 Bedrooms | $2,360 |
| 5 Bedrooms | $2,738 |
| 6 Bedrooms | $3,067 |
| 7 Bedrooms | $3,312 |
| 8 Bedrooms | $3,478 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,610 | $316,945 | 0.51% | F |
| 3BR | $2,100 | $410,223 | 0.51% | F |
| 4BR | $2,360 | $578,161 | 0.41% | F |
U.S. Census Bureau data (2024)
The analysis of the Section 8 program in ZIP code 55003, which encompasses parts of Bayport, MN, reveals a significant gap between the Fair Market Rent (FMR) and the actual market rent. For fiscal year 2024, the FMR is set at $1440, whereas the Census American Community Survey (ACS) reports the market rent to be $2028. This results in a gap of $588 per month, representing a 40.7% difference.
Given that the FMR is lower than the market rent, landlords and small-portfolio investors should understand the implications of renting to voucher tenants at rates below the open-market levels. The lower rental rate can affect the overall yield on investment properties. In Bayport, MN, where only 8.3% of residents are renters and the median home value stands at $435,210, the decision to participate in the Section 8 program must be weighed against the local real estate landscape.
The median household income in Bayport, MN is $125,893, which suggests that the majority of residents are homeowners. This demographic trend means that landlords who choose to accept Section 8 vouchers might find themselves in a niche market catering primarily to those eligible for government assistance. Accepting vouchers at the FMR of $1440 could mean leaving money on the table compared to the open-market rent of $2028.
To summarize, the $588 monthly gap, or 40.7%, between the FMR and market rent in ZIP 55003 presents a clear economic disadvantage for landlords who opt to rent at the FMR. While the Section 8 program offers stability and guaranteed payments, it also comes with the cost of reduced rental income. Landlords should consider these factors alongside Bayport's low rental population and high median home values when deciding whether to participate in the Section 8 program.
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.