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 | $1,260 |
| 1 Bedroom | $1,420 |
| 2 Bedrooms | $1,730 |
| 3 Bedrooms | $2,260 |
| 4 Bedrooms | $2,530 |
| 5 Bedrooms | $2,935 |
| 6 Bedrooms | $3,287 |
| 7 Bedrooms | $3,550 |
| 8 Bedrooms | $3,728 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,420 | $186,762 | 0.76% | D |
| 2BR | $1,730 | $307,174 | 0.56% | F |
| 3BR | $2,260 | $396,812 | 0.57% | F |
| 4BR | $2,530 | $492,413 | 0.51% | F |
| 5BR | $2,935 | $582,153 | 0.5% | F |
U.S. Census Bureau data (2024)
The economics of Section 8 housing in ZIP code 55108, which encompasses Falcon Heights, MN, within Ramsey County, can be clearly understood by examining the SAFMR (Small Area Fair Market Rent) and comparing it to the local market rent. For a two-bedroom apartment in this ZIP code, the SAFMR for fiscal year 2024 is set at $1700. This figure represents the maximum amount that the Section 8 program will pay for rent in this specific area.
Local market rent, as measured by ZORI (Zillow Observed Rent Index), stands at $1497. This is the average rent price that landlords typically charge for similar properties in the area. When a landlord participates in the Section 8 program, they agree to accept a certain amount of rent subsidized by the government, up to the SAFMR limit.
A Section 8 voucher does not cover the entire rent. Tenants are required to contribute a portion of their income towards the rent, usually around 30% of their adjusted monthly income. In addition to the rent, the voucher also includes utility allowances, which vary but are designed to help cover the cost of utilities such as electricity, gas, water, and sewer.
Let's walk through an example to illustrate the actual payment process. Suppose a tenant's portion of the rent is $400, and the utility allowance is $100. The total subsidy from the Section 8 program would then be $1700 minus the tenant's contribution of $400, plus the utility allowance of $100. This results in a total reimbursement of $1400 ($1700 - $400 + $100).
Given the local market rent of $1497, landlords participating in the Section 8 program for a two-bedroom apartment in ZIP 55108 would face a reimbursement gap of $97 per month. This means that the landlord would receive $1400 from the Section 8 program, falling short of the average market rent by $97.
In summary, the SAFMR for ZIP 55108 is $1700 for a two-bedroom unit, while the local market rent is $1497. Landlords should expect a reimbursement gap of $97 when renting to tenants with Section 8 vouchers for a two-bedroom property in this area.
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.