Section 8 Fair Market Rent (FMR) for ZIP 55330 - 2027

Investment Score for ZIP 55330

Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)

FY 2027 Fair Market Rent Rates

Unit Size	Monthly FMR
Studio	$1,220
1 Bedroom	$1,370
2 Bedrooms	$1,670
3 Bedrooms	$2,180
4 Bedrooms	$2,440
5 Bedrooms	$2,830
6 Bedrooms	$3,170
7 Bedrooms	$3,424
8 Bedrooms	$3,595

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
1BR	$1,370	$233,342	0.59%	F
2BR	$1,670	$296,628	0.56%	F
3BR	$2,180	$387,383	0.56%	F
4BR	$2,440	$462,536	0.53%	F
5BR	$2,830	$520,922	0.54%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 55330 (Elk River, MN) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 55330, as determined by HUD for 2026, is set at $1600 for a two-bedroom unit. This FMR represents approximately 16.6% of the median household income of $115,761, which is a relatively low percentage compared to national standards. However, the actual rental market in Elk River, MN, is significantly higher. The Zillow median price for a two-bedroom home is $289,662, which translates into a monthly rent of around $1,198 based on a typical mortgage payment (assuming a 4.5% interest rate and a 20-year amortization period). Given that the FMR is only $1600, this implies that landlords receiving Section 8 vouchers would be limited to charging no more than $1600 per month for a two-bedroom unit. This constraint can make it challenging for landlords to cover their costs, especially if they have properties with higher maintenance needs or are located in premium areas. #### Affordability & Renter Profile The population of ZIP code 55330 is 45,721, with 15.8% of residents being renters. This indicates a relatively small rental market compared to the overall population. The occupancy rate of 96.2% suggests that the rental market is quite tight, with very few vacant units available. Given the high median household income of $115,761, most residents likely own homes, making the rental market primarily serve those who prefer renting or cannot afford to purchase property. The FMR for a two-bedroom unit at $1600 is well below the median household income, implying that the rental market is generally affordable for the local population. However, the high price-to-FMR ratio of 15.1x indicates that the rental market is expensive relative to the FMR, which could pose challenges for low-income households seeking affordable housing. #### Investor Angle From an investor's perspective, the ZIP code 55330 presents a mixed picture. The FMR for a two-bedroom unit is $1600, but the actual median rent is much higher. For instance, the Zillow median price for a two-bedroom home translates to a monthly rent of about $1,198, which is far below the FMR. If an investor were to purchase a two-bedroom property at the Zillow median price, the potential rental income would be around $1,198 per month, assuming the property is rented out at its fair market value. However, if the property is rented to a Section 8 tenant, the landlord would be restricted to charging only $1600 per month, which might not cover all expenses such as mortgage payments, property taxes, insurance, and maintenance costs. Given the high price-to-FMR ratio of 15.1x, it is clear that the rental market is overpriced relative to the FMR. This makes it difficult for investors to achieve positive cash flow when relying solely on Section 8 vouchers. The investment grade for this ZIP code would be considered low due to the tight rental market and the high cost of entry into the rental market. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors should consider focusing on smaller units such as one-bedroom or studio apartments. The FMR for a one-bedroom unit is $1320, which is still below the median household income. This could provide a better chance of covering expenses and achieving positive cash flow. 2. **Target Lower-Priced Properties**: Investors should look for properties that are priced below the Zillow median. For example, a two-bedroom property priced at $250,000 would translate to a monthly rent of about $1,094, which is closer to the FMR and could offer a more balanced investment opportunity. This strategy would help mitigate the risk of negative cash flow. 3. **Consider Non-Section 8 Tenants**: Due to the high cost of entry and the tight rental market, investors might want to consider targeting non-Section 8 tenants. The median household income of $115,761 suggests that there is a significant portion of the population who can afford higher rents. By focusing on the broader rental market, investors can potentially achieve higher returns and positive cash flow. #### Bottom Line For Section 8-focused investors, the ZIP code 55330 (Elk River, MN) is a challenging market due to the high price-to-FMR ratio and the tight rental market. The recommendation would be to **skip** investing in this ZIP code unless you can find properties priced significantly below the market average. Alternatively, investors might want to consider other investment strategies that target a broader range of tenants to ensure positive cash flow.

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.