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 | $1,310 |
| 1 Bedroom | $1,480 |
| 2 Bedrooms | $1,800 |
| 3 Bedrooms | $2,350 |
| 4 Bedrooms | $2,630 |
| 5 Bedrooms | $3,051 |
| 6 Bedrooms | $3,417 |
| 7 Bedrooms | $3,690 |
| 8 Bedrooms | $3,875 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,800 | $288,390 | 0.62% | D |
| 3BR | $2,350 | $354,773 | 0.66% | D |
| 4BR | $2,630 | $434,019 | 0.61% | D |
| 5BR | $3,051 | $471,557 | 0.65% | D |
U.S. Census Bureau data (2024)
Skeptical investors looking into Albertville, MN (ZIP 55301) often have several concerns regarding the feasibility of investing in Section 8 properties. Let's address these key points with the available data.
Objection 1: Will FMR $1,800 (zip FY 2024) cover the mortgage on a $373,761 home?
The Fair Market Rent (FMR) for ZIP 55301 in fiscal year 2024 is set at $1,800. This figure represents the maximum amount that HUD will pay for rental housing. To determine if this covers the mortgage, we must consider the interest rates and loan terms. Assuming an average interest rate of 4% and a 30-year fixed mortgage, the monthly payment on a $373,761 home would be approximately $1,790. Therefore, the FMR of $1,800 is sufficient to cover the mortgage payment, leaving a small buffer for maintenance and other expenses.
Objection 2: Is there enough renter demand at 8.6%?
The percentage of renters in ZIP 55301 stands at 8.6%. This figure indicates the proportion of residents who rent their homes rather than own them. However, it does not directly reflect the demand for Section 8 rentals. To accurately gauge demand, we need to look at the number of active Section 8 voucher holders and the vacancy rate for affordable housing units. The current data does not provide these specifics, so while the general renter population is relatively low, the actual demand for subsidized housing cannot be conclusively determined from the given information alone.
Objection 3: Will vouchers keep pace with $2,625 market rents?
The average market rent in ZIP 55301 is $2,625. Given that the FMR is significantly lower at $1,800, there is a risk that voucher payments may not cover the full cost of market-rate rentals. However, landlords can negotiate the difference between the FMR and the actual rent with tenants, ensuring that they receive the full market value. Additionally, the Housing Choice Voucher program adjusts its payment standards annually based on local market conditions, which helps mitigate the risk of falling behind market rents.
In summary, while the FMR of $1,800 is adequate to cover the mortgage on a $373,761 home, the overall renter demand at 8.6% requires further investigation into the specific demand for subsidized housing. Lastly, although the FMR is below the market rent of $2,625, landlords can manage this gap through negotiations and rely on annual adjustments to the voucher payment standards.
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.