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 | $1,120 |
| 1 Bedroom | $1,270 |
| 2 Bedrooms | $1,540 |
| 3 Bedrooms | $2,040 |
| 4 Bedrooms | $2,280 |
| 5 Bedrooms | $2,645 |
| 6 Bedrooms | $2,962 |
| 7 Bedrooms | $3,199 |
| 8 Bedrooms | $3,359 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,540 | $296,600 | 0.52% | F |
| 3BR | $2,040 | $336,071 | 0.61% | D |
| 4BR | $2,280 | $387,312 | 0.59% | F |
U.S. Census Bureau data (2024)
The Section 8 thesis in ZIP code 55055, centered around Newport, 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 $1,330, while the Census ACS reports the market rent at $1,122. This means that the FMR is $208 higher than the market rent, representing an increase of approximately 18.5%. The higher FMR indicates that voucher tenants can afford to pay closer to the FMR rate, which is beneficial for landlords and small-portfolio investors.
The discrepancy between the FMR and market rent suggests that landlords in Newport, MN, can leverage this difference to improve their investment yields. With 33.1% of residents being renters and a median home value of $349,265, there is a strong demand for rental properties in the area. Additionally, the median income of $71,979 supports the ability of voucher recipients to cover a substantial portion of the FMR without placing undue financial strain on them.
For landlords, accepting Section 8 vouchers can be a strategic move to secure stable tenancy and potentially higher rents compared to the open-market average. While the upfront administrative work and potential scrutiny of property conditions might be seen as drawbacks, the long-term benefits of consistent rental income at rates above the local average can outweigh these costs. Furthermore, the reliability of the federal government backing the payment of the difference between the tenant's contribution and the FMR ensures a steady cash flow, which is particularly advantageous in a market where rents are generally lower.
In summary, the gap between the FMR and market rent in ZIP 55055 presents an opportunity for landlords to enhance their investment returns by attracting voucher tenants. This strategy aligns well with the economic context of Newport, MN, where the median income and home values suggest a viable market for such an approach.
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.