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 | $1,420 |
| 1 Bedroom | $1,600 |
| 2 Bedrooms | $1,950 |
| 3 Bedrooms | $2,550 |
| 4 Bedrooms | $2,850 |
| 5 Bedrooms | $3,306 |
| 6 Bedrooms | $3,703 |
| 7 Bedrooms | $3,999 |
| 8 Bedrooms | $4,199 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,600 | $232,108 | 0.69% | D |
| 2BR | $1,950 | $281,045 | 0.69% | D |
| 3BR | $2,550 | $319,488 | 0.8% | D |
U.S. Census Bureau data (2024)
When considering whether to purchase a property in ZIP code 55114 (Saint Paul, MN) for Section 8 investment, follow this decision tree:
1) Does the Fair Market Rent (FMR) of $1820 cover the debt service on a $280,935 property?
Yes: The FMR of $1820 is sufficient to cover the debt service on a $280,935 property. This indicates that the rental income will meet the financial obligations associated with owning the property.
No: The FMR of $1820 does not fully cover the debt service on a $280,935 property. This suggests that the rental income may not be adequate to meet all financial obligations, making the investment less attractive.
It Depends: The answer hinges on the specific mortgage terms and interest rates. Calculate your monthly mortgage payment, including principal, interest, taxes, and insurance. If it exceeds $1820, then the FMR does not sufficiently cover the debt service.
2) Is the market rent ($1,554 ZORI) above, at, or below the FMR?
Above: If the market rent is above the FMR, at $1,554 ZORI, it is below the FMR of $1820. This means that the market conditions do not favor higher rents, which could impact profitability outside of Section 8.
At: The market rent is not at the FMR; it is lower at $1,554 ZORI. Therefore, this scenario does not apply.
Below: The market rent is below the FMR, at $1,554 ZORI. This suggests that Section 8 properties might offer better returns compared to the general market rent.
3) Are 82.9% renters + N/A-day days on market (DOM) enough demand?
Yes: With 82.9% of residents being renters, there is significant demand for rental properties in ZIP 55114. However, the lack of specific days on market (DOM) data makes it challenging to assess how quickly properties are rented out. Despite this, the high percentage of renters indicates strong overall demand.
No: This option does not apply given the high percentage of renters. There is substantial demand for rentals in the area.
It Depends: While the 82.9% renter rate supports demand, the absence of DOM data introduces uncertainty. Evaluate other local market indicators such as vacancy rates and tenant turnover to make a more informed decision.
In conclusion, if the FMR covers your debt service and you find the demand satisfactory based on the renter percentage and additional market analysis, then purchasing a property in ZIP 55114 for Section 8 investment is viable. Otherwise, consider other areas where the FMR better aligns with debt service requirements and where market conditions are clearer.
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.