Section 8 Fair Market Rent (FMR) for ZIP 55337 - 2027

Investment Score for ZIP 55337

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	$1,360
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

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	$1,540	$103,956	1.48%	A
2BR	$1,870	$239,533	0.78%	D
3BR	$2,440	$352,206	0.69%	D
4BR	$2,740	$407,392	0.67%	D
5BR	$3,178	$443,605	0.72%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 55337 (Burnsville, MN) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for Burnsville, MN (ZIP 55337) in 2026 is set at $1820 for a two-bedroom unit. This amount represents 26.0% of the median household income in the area, which is $84,110. The FMRs for other bedroom types are as follows: $1320 for a zero-bedroom unit, $1500 for a one-bedroom unit, $2410 for a three-bedroom unit, and $2700 for a four-bedroom unit. However, the actual rental market dynamics show that the Zillow median price for a two-bedroom unit is significantly higher at $238,074. This translates into a price-to-FMR ratio of 10.9x, indicating that the actual market rent is much higher than what the FMR suggests. For voucher holders, this means that they will likely face significant constraints in finding units that accept their vouchers and fall within the FMR limits. Given the high price-to-FMR ratio, landlords may be less inclined to accept Section 8 vouchers due to the lower rent compared to market rates. #### Affordability & Renter Profile In Burnsville, MN, 36.0% of the population are renters, with a total population of 47,633. The occupancy rate is very high at 98.5%, suggesting that the rental market is quite tight. With a median household income of $84,110, the majority of residents can afford market-rate housing, but those relying on Section 8 vouchers may struggle to find affordable units. The FMR for a two-bedroom unit is only 26.0% of the median income, which implies that the typical resident could easily afford a two-bedroom unit without assistance. However, for those who do rely on Section 8 vouchers, the limited supply of units that accept them and fall within the FMR range makes it a challenging environment. The high occupancy rate also indicates that there is little room for new rentals to enter the market without increasing competition and potentially driving up rents further. #### Investor Angle From an investor perspective, the ZIP code 55337 is not likely to be cash-flow positive at the FMR levels. The Zillow median price for a two-bedroom unit is $238,074, while the FMR is only $1820. This large disparity suggests that investors would need to charge market rates to achieve positive cash flow, making reliance on FMR unfeasible. To determine the investment grade, we must consider the overall market conditions and the potential for rental income. Given the tight market and high occupancy rate, there is a strong demand for rental properties. However, the challenge lies in finding tenants who can pay market rates or in securing enough Section 8 voucher holders willing to live in the area despite the limited number of units that accept vouchers. #### Specific Actionable Insights 1. **Focus on Market-Rate Rentals**: Since the FMR is significantly below the market rent, investors should focus on attracting market-rate tenants rather than solely relying on Section 8 vouchers. This strategy will likely yield better financial returns given the high demand for rentals in the area. 2. **Consider Mixed-Income Developments**: To balance the need for affordable housing with the financial realities of the market, developers might consider mixed-income developments where some units are reserved for Section 8 voucher holders, while others are priced at market rates. This approach can help ensure a steady stream of income while still providing affordable options for low-income residents. 3. **Engage with Local Housing Authorities**: Investors should engage with local housing authorities to understand the availability of Section 8 vouchers and any incentives or programs that might support the development of affordable housing. This engagement can provide valuable insights into the local rental market and potential opportunities for securing voucher holders. #### Bottom Line Given the high price-to-FMR ratio and the tight rental market, the recommendation for Section 8-focused investors is to **skip** this ZIP code. The financial constraints associated with FMR levels make it difficult to achieve positive cash flow, and the limited number of units that accept vouchers suggests a challenging environment for finding suitable tenants. Instead, investors should consider areas with a more favorable price-to-FMR ratio or explore strategies that combine market-rate and subsidized rentals to optimize financial performance. --- This analysis provides a clear picture of the rental market in ZIP 55337, highlighting the challenges and opportunities for both tenants and investors. The high market rents and limited availability of units that accept Section 8 vouchers suggest that the area is not well-suited for investors focusing exclusively on subsidized housing.

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.