Section 8 Fair Market Rent (FMR) for ZIP 55104 - 2027

Investment Score for ZIP 55104

Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)

FY 2027 Fair Market Rent Rates

Unit Size	Monthly FMR
Studio	$1,160
1 Bedroom	$1,310
2 Bedrooms	$1,590
3 Bedrooms	$2,080
4 Bedrooms	$2,330
5 Bedrooms	$2,703
6 Bedrooms	$3,027
7 Bedrooms	$3,269
8 Bedrooms	$3,432

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
1BR	$1,310	$178,889	0.73%	D
2BR	$1,590	$248,624	0.64%	D
3BR	$2,080	$304,608	0.68%	D
4BR	$2,330	$372,123	0.63%	D
5BR	$2,703	$476,271	0.57%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 55104 (Saint Paul, MN) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 55104 is set by HUD for 2026 as follows: - 0BR: $1110 - 1BR: $1260 - 2BR: $1530 - 3BR: $2020 - 4BR: $2270 These figures represent the maximum amount that a Section 8 voucher holder can pay for rent. However, the actual rents in the area can be significantly higher. For instance, the Zillow median price for a 2BR property is $242,740, which translates to a monthly mortgage payment of approximately $1,300 based on typical financing terms. This means that the price-to-FMR ratio for a 2BR unit is 13.2x, indicating that the actual cost of renting is much higher than the FMR. Given these dynamics, voucher holders face significant constraints. They must find landlords willing to accept Section 8 vouchers and who are also willing to rent properties below the market rate. The disparity between FMR and actual rents suggests that voucher holders might struggle to find suitable housing options, particularly in a competitive market like Saint Paul. #### Affordability & Renter Profile ZIP code 55104 has a population of 45,762, with 46.9% of residents being renters. The occupancy rate stands at 92.1%, indicating a relatively tight rental market. With a median household income of $75,712, the affordability of housing is a concern for many residents. Specifically, a 2BR unit at FMR costs $1530, which represents 24.2% of the median income. This is within the affordable range for most households but still leaves a significant portion of income allocated to housing costs. The high renter percentage and occupancy rate suggest that there is strong demand for rental units in this ZIP code. Given the limited supply and the fact that many residents rely on rental housing, it is likely that the market remains competitive and tight. This situation could lead to upward pressure on rents, making it even harder for voucher holders to find affordable housing. #### Investor Angle From an investor perspective, the key question is whether the ZIP code offers cash-flow positive opportunities at the FMR rates. Based on the provided data, the Zillow median price for a 2BR unit is $242,740. Assuming a typical mortgage interest rate of around 5%, the monthly mortgage payment would be approximately $1,300. Adding in typical property taxes, insurance, and maintenance costs, the total monthly expenses could easily exceed the FMR of $1530 for a 2BR unit. However, the Zillow median price does not necessarily reflect the true cost of acquiring a rental property. There may be opportunities to purchase properties below the median price, which could make them more financially viable for investors. Additionally, the high occupancy rate indicates a stable demand for rental units, which could provide a steady stream of tenants. In terms of investment grade, the ZIP code appears to have moderate risk due to the tight rental market and the potential difficulty in finding tenants willing to pay below market rates. Nonetheless, the strong demand for rentals and the high median income suggest that there is a solid foundation for investment, especially if the investor can secure properties at lower-than-median prices. #### Specific Actionable Insights 1. **Target Lower Priced Properties**: Investors should focus on purchasing properties that are priced below the Zillow median. For example, a 2BR unit priced at $200,000 would have a monthly mortgage payment of about $1,100, leaving room for a profit margin when rented at the FMR of $1530. 2. **Seek Out Affordable Housing Initiatives**: Engage with local affordable housing programs and incentives. In Saint Paul, there are often initiatives aimed at supporting affordable housing, which could reduce acquisition costs and operating expenses, making FMR-based rentals more profitable. 3. **Consider Multi-Family Units**: Given the high demand for rental housing, multi-family units (such as duplexes or small apartment buildings) may offer better cash flow opportunities. A 3BR or 4BR unit rented out at FMR levels could generate higher monthly income, potentially covering the increased costs associated with larger properties. #### Bottom Line For Section 8-focused investors, the ZIP code 55104 presents a mixed picture. While the tight rental market and high occupancy rate indicate strong demand, the significant gap between FMR and actual rents makes it challenging to achieve positive cash flow without careful targeting of lower-priced properties or participation in affordable housing programs. **Recommendation:** Hold. The ZIP code offers opportunities for investors, but they need to be strategic in their approach to ensure profitability. Engaging with local affordable housing initiatives and focusing on lower-priced properties could help mitigate some of the financial risks. --- This analysis provides a detailed look into the rental market dynamics, affordability concerns, and investment opportunities in ZIP code 55104, based solely on the provided data. It highlights the challenges faced by Section 8 voucher holders and the considerations for potential investors.

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.