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 | $1,370 |
| 1 Bedroom | $1,540 |
| 2 Bedrooms | $1,880 |
| 3 Bedrooms | $2,450 |
| 4 Bedrooms | $2,750 |
| 5 Bedrooms | $3,190 |
| 6 Bedrooms | $3,573 |
| 7 Bedrooms | $3,859 |
| 8 Bedrooms | $4,052 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,880 | $468,286 | 0.4% | F |
| 3BR | $2,450 | $507,272 | 0.48% | F |
| 4BR | $2,750 | $756,961 | 0.36% | F |
| 5BR | $3,190 | $948,472 | 0.34% | F |
U.S. Census Bureau data (2024)
The Section 8 program in ZIP code 55340, located in Corcoran, Minnesota, presents a significant opportunity for landlords and small-portfolio investors due to the substantial gap between the Fair Market Rent (FMR) and the actual market rent. The FMR for ZIP 55340 for fiscal year 2024 is set at $2160, while the Census ACS data indicates that the market rent stands at $1452. This creates a gap of $708, or approximately 48.8%, between what voucher tenants can pay and what the open market demands.
Given that the FMR exceeds the market rent, it is evident that voucher tenants can offer higher rental income compared to typical market rates. This makes the ZIP 55340 a prime location for a yield play strategy. Landlords can benefit from the guaranteed payments through the Housing Choice Voucher Program, which ensures timely rent collection without the risks associated with non-payment from market-rate tenants. Additionally, the stable income stream provided by the government-backed vouchers can lead to better financial performance for properties in this area.
In the context of Corcoran, where only 7.7% of residents are renters and the median home value is $679,539, the relatively low market rent of $1452 suggests that there is a limited supply of affordable rental units. The median income in the area is $178,553, indicating that most residents could afford homeownership, but those who cannot still need access to housing. By participating in the Section 8 program, landlords can fill this niche and secure a steady income that surpasses the local market rate, thereby enhancing their investment yields.
However, it's important to note that accepting Section 8 tenants comes with its own set of responsibilities. Landlords must ensure that their properties meet the housing quality standards set by the program, which can sometimes require additional maintenance costs. Nonetheless, the financial benefits outweigh these considerations, especially when the FMR is significantly above the market rent, as it is in ZIP 55340.
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.