Section 8 Fair Market Rent (FMR) for ZIP 55106 - 2027

Investment Score for ZIP 55106

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	$1,120
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

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	$1,270	$159,283	0.8%	D
2BR	$1,540	$223,453	0.69%	D
3BR	$2,040	$268,814	0.76%	D
4BR	$2,280	$294,100	0.78%	D
5BR	$2,645	$313,752	0.84%	C

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 55106 (Saint Paul, MN) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 55106 in Saint Paul, MN, for 2026 is set at $1520 for a two-bedroom unit. This amount represents 26.0% of the median household income of $70,187. However, the actual rental market price for a two-bedroom unit is significantly higher. According to Zillow, the median price for a two-bedroom home is $220,694, which translates to a monthly rent of approximately $1839 when considering a typical mortgage payment based on a 4.5% interest rate over 30 years. The price-to-FMR ratio of 12.1x indicates that the actual market price is about 12 times the FMR, suggesting that actual rents are much higher than the FMR. This discrepancy creates significant constraints for Section 8 voucher holders. They are limited to finding units that do not exceed the FMR, which can be challenging given the high actual market rents. For instance, a voucher holder would need to find a two-bedroom unit renting for $1520 or less, whereas the average market rent is around $1839. This gap could result in fewer available options for voucher holders, potentially leading to longer wait times and increased competition for affordable units. #### Affordability & Renter Profile ZIP code 55106 has a population of 56,708, with 38.9% being renters. The occupancy rate stands at 94.5%, indicating a relatively tight rental market. Given the median household income of $70,187, the affordability of housing is a concern for many residents. The FMR for a two-bedroom unit at $1520 is only 26.0% of the median income, which suggests that housing is generally affordable for those earning close to the median. However, the actual market rent of $1839 is 26.0% higher than the FMR, making it more difficult for lower-income households to find suitable rentals. The high occupancy rate and the large percentage of renters suggest that there is strong demand for rental properties in this area. This tight market means that landlords have more leverage in setting rents, which could explain the higher actual market rents compared to the FMR. Additionally, the fact that 38.9% of the population are renters indicates a diverse range of individuals who may be looking for affordable housing, including families, students, and young professionals. #### Investor Angle From an investor perspective, the ZIP code 55106 offers a mixed picture. While the median household income is relatively high at $70,187, the actual market rents are also high, which can affect the cash flow potential of properties rented at the FMR. For example, a two-bedroom unit rented at the FMR of $1520 would generate less revenue than if rented at the market rate of $1839. This difference could impact the overall profitability of the investment, especially when considering property management costs, maintenance expenses, and other financial obligations. However, the strong demand for rental properties, indicated by the high occupancy rate, suggests that there is a good chance of maintaining steady occupancy. The FMRs are set to ensure that low-income households can afford housing, and while they may not provide the highest returns, they offer stability and predictability. The investment grade for this ZIP code would likely be moderate to high due to the strong rental market and the presence of a significant number of renters. #### Specific Actionable Insights 1. **Focus on Units Below FMR**: Investors should focus on acquiring units that are priced below the FMR to maximize their chances of attracting Section 8 voucher holders. For instance, a three-bedroom unit priced at $1900 instead of the FMR of $2020 would be more attractive to voucher holders and could help secure long-term tenants. 2. **Consider Multi-Family Properties**: Given the high occupancy rate and the significant number of renters, multi-family properties could be particularly lucrative. These properties often benefit from economies of scale, reducing per-unit costs and increasing overall profitability. A two-bedroom unit renting at $1520 would still generate substantial cash flow when combined with other units in a multi-family complex. 3. **Engage with Local Housing Authorities**: Building relationships with local housing authorities can provide valuable insights into the availability of vouchers and the preferences of voucher holders. This can help investors tailor their offerings to meet the needs of these tenants, ensuring a steady stream of qualified applicants. #### Bottom Line For Section 8-focused investors, the ZIP code 55106 presents a moderately favorable environment. The strong rental market and high occupancy rates suggest a stable demand for housing, but the high actual market rents indicate that cash flow will be modest compared to market-rate rentals. Therefore, the recommendation is to **Hold** investments in this ZIP code, focusing on units priced slightly below the FMR to attract voucher holders while maintaining reasonable cash flow. Investors should also consider multi-family properties to leverage economies of scale and engage with local housing authorities to optimize their offerings.

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.