Location: Sibley County, MN | Metro: Sibley County, MN
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 | $730 |
| 1 Bedroom | $800 |
| 2 Bedrooms | $1,050 |
| 3 Bedrooms | $1,450 |
| 4 Bedrooms | $1,760 |
| 5 Bedrooms | $2,042 |
| 6 Bedrooms | $2,287 |
| 7 Bedrooms | $2,470 |
| 8 Bedrooms | $2,594 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,450 | $258,524 | 0.56% | F |
U.S. Census Bureau data (2024)
In ZIP code 55307, understanding the economics of Section 8 housing can help landlords and small-portfolio investors make informed decisions about their properties. The Section 8 program, officially known as the Housing Choice Voucher Program, aims to assist low-income families, the elderly, and the disabled to afford decent, safe, and sanitary housing in the private rental market.
The SAFMR (Small Area Fair Market Rent) for a two-bedroom apartment in ZIP 55307 for fiscal year 2026 is set at $1,010. This figure represents the maximum amount that the federal government will pay to landlords on behalf of eligible tenants. It's important to note that this rate is specific to this ZIP code and reflects the local rental market conditions.
Local market rents, according to the Census ACS, run at an average of $750 for a two-bedroom unit. However, the actual payment a landlord receives from a Section 8 voucher depends on several factors including the tenant's portion of the rent and utility allowances.
The tenant's portion of the rent is typically 30% of their adjusted income. If we assume a hypothetical tenant income that would result in a monthly contribution of $250, the remaining $760 would come from the government subsidy, calculated as the difference between the SAFMR and the tenant's contribution. This calculation assumes the total rent does not exceed the SAFMR of $1,010.
Utility allowances are additional payments made to cover electricity, water, and other household utilities. These allowances vary but can add up to $100 or more per month depending on the specifics of the property and the tenant's needs. Therefore, the landlord could receive an additional $100 in utility allowances, bringing the total reimbursement to $860 per month.
This means that in ZIP 55307, where the market rent is $750, a landlord participating in the Section 8 program would receive a reimbursement gap of $160 per month. This gap is the difference between the local market rent and the total reimbursement received from the government and tenant, indicating that landlords are effectively subsidized by the government to accept lower rent rates than the market might otherwise bear.
To summarize, landlords in ZIP 55307 who rent a two-bedroom unit to a Section 8 participant will be reimbursed up to $1,010, with the tenant contributing approximately 30% of their income towards the rent, and utility allowances covering some of the tenant's living expenses. This results in a typical reimbursement that exceeds the local market rent, providing a surplus of $160 per month for a two-bedroom unit.
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.