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 | $1,120 |
| 1 Bedroom | $1,270 |
| 2 Bedrooms | $1,540 |
| 3 Bedrooms | $2,040 |
| 4 Bedrooms | $2,280 |
| 5 Bedrooms | $2,645 |
| 6 Bedrooms | $2,962 |
| 7 Bedrooms | $3,199 |
| 8 Bedrooms | $3,359 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,540 | $374,618 | 0.41% | F |
| 3BR | $2,040 | $429,019 | 0.48% | F |
| 4BR | $2,280 | $466,806 | 0.49% | F |
U.S. Census Bureau data (2024)
Annandale, Minnesota's ZIP code 55302 is characterized by a relatively small population of 7,326 residents. The neighborhood has a low rental rate, with only 10.5% of the population being renters, indicating a predominantly owner-occupied community. Median household income in the area stands at $83,235, suggesting a middle-class neighborhood where most families can afford to purchase homes rather than rent. The median home value in ZIP 55302 is $401,509, reflecting a stable housing market with modest appreciation.
Moving into the economic specifics of renting, the Fair Market Rent (FMR) for ZIP 55302 as of fiscal year 2024 is set at $1,320. This figure contrasts sharply with the actual market rent, which according to the Census American Community Survey (ACS), averages around $1,050. This discrepancy highlights an opportunity for landlords and small-portfolio investors who can leverage the higher FMR to attract Section 8 tenants, thereby securing a more reliable and consistent income stream.
The practical question for investors is whether ZIP 55302 suits a hands-off voucher operator or requires a more hands-on approach. Given the lower market rent compared to the FMR, a hands-off strategy could work well for those interested in stable, long-term investments. However, for those looking to add value, opportunities exist in improving properties to match the higher FMR, potentially increasing rental income and property values over time.
In summary, ZIP 55302 in Annandale, MN offers a balanced investment landscape. With a solid median income and home value, it supports both hands-off and value-add strategies. Investors should consider the potential for increasing rents closer to the FMR through property improvements to maximize returns.
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.