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 | $1,360 |
| 1 Bedroom | $1,540 |
| 2 Bedrooms | $1,870 |
| 3 Bedrooms | $2,440 |
| 4 Bedrooms | $2,740 |
| 5 Bedrooms | $3,178 |
| 6 Bedrooms | $3,559 |
| 7 Bedrooms | $3,844 |
| 8 Bedrooms | $4,036 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,870 | $263,181 | 0.71% | D |
| 3BR | $2,440 | $451,474 | 0.54% | F |
| 4BR | $2,740 | $633,314 | 0.43% | F |
| 5BR | $3,178 | $738,415 | 0.43% | F |
U.S. Census Bureau data (2024)
The ZIP code 55120, located in Mendota Heights, Minnesota, stands out due to its unique demographic and economic profile. With a total population of 5,058 residents, 38.7% of whom are renters, the area reflects a balance between homeowners and tenants. The median household income here is $116,346, indicating a relatively affluent community. The median home value of $512,728 further underscores the high cost of living in this part of Dakota County.
When it comes to Section 8 housing, the ZIP code offers an interesting contrast between federal guidelines and local market conditions. The Fair Market Rent (FMR) for ZIP 55120 in fiscal year 2024 is set at $1,360, which is notably lower than the Census Bureau's American Community Survey (ACS) estimate of the market rent at $1,628. This discrepancy means that landlords accepting Section 8 vouchers in Mendota Heights will be receiving less than the typical market rate, potentially impacting their profitability.
The data suggests that ZIP 55120 is a stable area. High median incomes and home values indicate a robust local economy where residents can afford higher rents and property taxes. However, the significant gap between the FMR and the market rent could signal a transitional phase for landlords who are considering whether to accept Section 8 vouchers. They must weigh the benefits of guaranteed rental payments against the lower rates compared to the market.
To summarize, Mendota Heights presents a mixed picture for landlords interested in Section 8 properties. While the area is economically stable, the lower FMR compared to market rates might lead some landlords to reconsider their participation in the program. For small-portfolio investors, the decision to accept Section 8 vouchers should be made with careful consideration of these economic factors.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). 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.