Section 8 Fair Market Rent (FMR) for ZIP 55112 - 2027

Investment Score for ZIP 55112

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	$1,190
1 Bedroom	$1,340
2 Bedrooms	$1,630
3 Bedrooms	$2,130
4 Bedrooms	$2,390
5 Bedrooms	$2,772
6 Bedrooms	$3,105
7 Bedrooms	$3,353
8 Bedrooms	$3,521

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	$1,340	$174,630	0.77%	D
2BR	$1,630	$267,819	0.61%	D
3BR	$2,130	$367,765	0.58%	F
4BR	$2,390	$452,671	0.53%	F
5BR	$2,772	$539,503	0.51%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 55112 (New Brighton, MN) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 55112 is set by HUD for 2026. For a two-bedroom apartment, the FMR is $1570 per month. However, the Zillow median price for a two-bedroom home in this area is $261,354, which translates to a monthly rent of approximately $1172 based on a typical rental yield of 1%. This indicates that the actual rents in the market are significantly lower than the FMR. The price-to-FMR ratio of 13.9x suggests that the median home value is much higher than the rent, implying that the rental market is relatively affordable compared to the overall housing market. For voucher holders, the constraints are primarily related to finding units that are willing to accept Section 8 vouchers. Given that the actual rents are below the FMR, landlords who accept vouchers should have a good chance of filling their units. However, the challenge lies in the willingness of landlords to participate in the program due to administrative burdens and potential delays in payment. #### Affordability & Renter Profile With a median household income of $93,838, New Brighton residents generally have a strong financial standing. However, the 32.9% renter population suggests that there is a significant segment of the community that relies on rental housing. The occupancy rate of 96.1% indicates a tight rental market, where most available units are occupied. Given that 20.1% of the median income is required for a two-bedroom unit at the FMR, it is clear that renting is still a substantial expense for many residents. This makes affordability a critical issue for renters, particularly those relying on Section 8 vouchers. The high occupancy rate also implies that there is little excess capacity in the rental market, making it challenging for new entrants to find available units. #### Investor Angle From an investor perspective, the ZIP code 55112 appears to be cash-flow positive at the FMR levels. The actual rents being below the FMR suggest that there is room for growth if investors can negotiate with landlords to accept vouchers at the FMR rates. To determine the investment grade, we need to consider the demand for rental properties and the likelihood of maintaining occupancy. With a 96.1% occupancy rate and a significant portion of the population being renters, the demand for rental properties is robust. However, the challenge remains in securing landlords' participation in the Section 8 program. #### Specific Actionable Insights 1. **Focus on Two-Bedroom Units**: Given that the FMR for a two-bedroom unit is $1570 and the Zillow median price suggests a lower actual rent of around $1172, there is a potential profit margin for investors who can secure these units at the FMR. This would require engaging with landlords who are willing to accept Section 8 vouchers and understanding the local rental market dynamics. 2. **Engage with Local Landlords**: Since the actual rents are below the FMR, it is crucial to work closely with local landlords to educate them about the benefits of accepting Section 8 vouchers. This could include providing support for the administrative process and highlighting the stability of rental income. Additionally, investors should be prepared to offer incentives to landlords to encourage participation. 3. **Monitor Rental Market Trends**: The tight rental market with a 96.1% occupancy rate suggests that competition for rental units is high. Investors should keep a close eye on any changes in the rental market, such as increases in vacancy rates or shifts in renter demographics, which could impact the demand for Section 8 units. #### Bottom Line For Section 8-focused investors, the ZIP code 55112 presents a mixed picture. While the rental market is tight and the demand for rental properties is strong, the actual rents are currently below the FMR, indicating potential for growth. The key challenge will be in securing landlord participation in the Section 8 program. Therefore, the recommendation is to **Hold** on investments until more landlords are willing to accept vouchers at the FMR rates. Engaging in local education efforts and offering incentives could help improve the situation over time.

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.