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 | $1,360 |
| 1 Bedroom | $1,530 |
| 2 Bedrooms | $1,860 |
| 3 Bedrooms | $2,430 |
| 4 Bedrooms | $2,720 |
| 5 Bedrooms | $3,155 |
| 6 Bedrooms | $3,534 |
| 7 Bedrooms | $3,817 |
| 8 Bedrooms | $4,008 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,860 | $286,688 | 0.65% | D |
| 3BR | $2,430 | $366,970 | 0.66% | D |
| 4BR | $2,720 | $429,629 | 0.63% | D |
| 5BR | $3,155 | $494,851 | 0.64% | D |
U.S. Census Bureau data (2024)
The Section 8 thesis in ZIP code 55014, specifically in Circle Pines, MN, revolves around the disparity between the Fair Market Rent (FMR) set at $1800 for fiscal year 2024 and the actual market rent, which stands at $1723 as measured by the Zillow Observed Rental Index (ZORI). This gap amounts to $77, representing approximately 4.5% of the FMR.
In this scenario where the FMR exceeds the market rent, landlords and small-portfolio investors can leverage the higher guaranteed payments from the Section 8 program to achieve a higher rental yield. The median home value in Circle Pines is $375,750, and the median household income is $103,658. With only 14.2% of residents being renters, the demand for rental properties is lower compared to owner-occupied homes. This makes it particularly advantageous for property owners to participate in the Section 8 program, as they receive a consistent and reliable income that surpasses the local market rates.
The cost of housing voucher tenants below open-market rates is mitigated by the federal subsidy. Landlords who accept Section 8 vouchers in Circle Pines will benefit from the $77 premium per unit over the current market rate. This premium is significant when considering the overall rental market conditions and the relatively low percentage of renters in the area. It ensures that landlords can maintain their properties and cover operational costs while also earning a slightly higher income than what the open market offers.
To summarize, the $77 premium, or 4.5% above the market rent, makes accepting Section 8 vouchers a strategic yield play for landlords in Circle Pines. Given the median home values and incomes in the area, this gap provides an opportunity to secure a steady stream of income that is competitive with, and in some cases, better than, the local rental market.
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.