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 | $1,580 |
| 1 Bedroom | $1,790 |
| 2 Bedrooms | $2,170 |
| 3 Bedrooms | $2,830 |
| 4 Bedrooms | $3,180 |
| 5 Bedrooms | $3,689 |
| 6 Bedrooms | $4,132 |
| 7 Bedrooms | $4,463 |
| 8 Bedrooms | $4,686 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,170 | $332,161 | 0.65% | D |
| 3BR | $2,830 | $414,882 | 0.68% | D |
| 4BR | $3,180 | $528,813 | 0.6% | D |
| 5BR | $3,689 | $622,020 | 0.59% | F |
U.S. Census Bureau data (2024)
Lakeville, ZIP 55044, functions as a high-growth suburban hub situated roughly 25 minutes south of Minneapolis, offering a blend of established residential neighborhoods and expanding commercial corridors. This area is characterized by its abundant parkland and a reputation for strong public services, making it a magnet for families seeking space outside the urban core. A key economic anchor here is the Lakeville Area School District (Independent School District 194), which serves as one of the region’s largest employers and drives consistent housing demand from educators and staff.
From a financial perspective, the local market shows a clear divergence between subsidized benchmarks and private market rates. The FY2026 2-Bedroom Fair Market Rate (FMR) sits at $2,180, while current market rents (Zillow ZORI) average $1,979, creating a $201 premium for voucher holders. Median home values are substantial at $515,328, with properties moving at a moderate pace of 71 days on market. Notably, the median 2-bedroom sale price is $333,569, suggesting investors can acquire entry-level assets significantly below the area’s overall mid-tier valuation.
Demand fundamentals are robust, anchored by a wealthy local population with a median household income of $141,551. However, the renter share is exceptionally low at 12.0%, indicating a predominantly ownership-driven community. This scarcity of rental stock amplifies value for available units. The tenant pool is bolstered by the highly rated school system and major retailers near the I-35 corridors, ensuring steady interest from families, though Section 8 applicants may face stiffer competition due to the area's overall affluence.
The Section 8 verdict for Lakeville 55044 leans toward appreciation and stability rather than high-yield cash flow. While the $201 gap above market rent provides a safety net, the high acquisition cost relative to the renter share limits immediate yield. The strongest angle here is betting on long-term asset growth in an affluent Minneapolis suburb with low inventory, using the reliable FMR to ensure debt coverage while riding the appreciation curve of a high-demand jurisdiction.
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.