Location: Goodhue County, MN | Metro: Wabasha County, MN 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 | $920 |
| 1 Bedroom | $1,080 |
| 2 Bedrooms | $1,310 |
| 3 Bedrooms | $1,800 |
| 4 Bedrooms | $2,180 |
| 5 Bedrooms | $2,529 |
| 6 Bedrooms | $2,832 |
| 7 Bedrooms | $3,059 |
| 8 Bedrooms | $3,212 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,800 | $342,087 | 0.53% | F |
U.S. Census Bureau data (2024)
A skeptical investor might question whether the Fair Market Rent (FMR) of $1,150 for ZIP code 55027 can sufficiently cover the mortgage on a home valued at $377,216. To address this, let's consider the typical mortgage scenario. Assuming a standard 30-year fixed-rate mortgage with an interest rate of around 4%, the monthly payment on a $377,216 home would be approximately $1,800, including principal, interest, taxes, and insurance. This means that the FMR does not fully cover the mortgage payment, leaving a shortfall of roughly $650 per month. However, it's important to note that the FMR is set to ensure that a family paying more than 30% of their income for housing is considered low-income and eligible for assistance, which could help mitigate some of this financial pressure.
The second objection relates to the rental demand in ZIP 55027, which stands at 11.9%. This percentage indicates the proportion of households that rent rather than own their homes. While this figure is relatively low, it still represents a significant number of potential tenants. The key here is understanding the local rental market dynamics. If the area has a growing population or employment opportunities, this could lead to increased rental demand over time. Moreover, the percentage alone doesn't provide a complete picture; the total number of renters and the vacancy rate are also crucial factors to consider.
Lastly, an investor might wonder if Housing Choice Vouchers will keep pace with the market rents, currently at $961. The voucher program aims to cover a substantial portion of the market rent, typically up to 30% of the median income for the area. However, the data does not specify the exact amount of voucher support available in ZIP 55027. It's essential to research the local housing authority's policies and the average voucher amounts they provide. Historically, voucher amounts have adjusted with inflation and changes in the cost of living, but this adjustment may lag behind rapid increases in market rents.
In summary, while the FMR of $1,150 does not fully cover the mortgage on a $377,216 home, the voucher program can offer additional support. The rental demand at 11.9% is a concern but should be evaluated in the context of broader market trends. Lastly, the adequacy of vouchers compared to market rents at $961 requires further investigation into local voucher policies and historical trends.
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.