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: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,540 | $311,440 | 0.49% | F |
| 3BR | $2,040 | $357,376 | 0.57% | F |
| 4BR | $2,280 | $371,331 | 0.61% | D |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP 55390, Waverly, MN, reveals two distinct scenarios based on the Fair Market Rent (FMR) and market rent figures. Using the annualized 2BR FMR of $1330 for FY 2024, the potential annual rental income would be $15,960. Against the median home value of $348,815, this translates to an implied gross yield of approximately 4.58%. This calculation is straightforward: divide the annual rental income by the property value.
In contrast, using the market rent figure of $1,281 from the Census ACS, the annual rental income would be $15,372. The implied gross yield in this scenario is slightly lower at about 4.41%. These yields are calculated without factoring in operating expenses, which means they represent the upper limit of potential returns.
The gross yield comparison between the FMR and market rent scenarios shows that the FMR-based yield is higher by about 0.17 percentage points. However, considering the renter density of 8.7%, it's important to recognize the limitations of these figures. Renter density is relatively low, indicating that there may be fewer potential tenants in the area, which could affect the occupancy rate and, consequently, the actual yield.
The N/A-day DOM (Days on Market) suggests incomplete data regarding how quickly properties are rented out. Without this information, it's challenging to predict the exact time frame for achieving the calculated yields. Given the low renter density, the market rent scenario might be more realistic, as it reflects the current rental environment rather than the potentially higher FMR rates.
To summarize, the FMR-based gross yield of 4.58% is marginally higher than the market rent-based gross yield of 4.41%. However, the actual performance may differ due to the limited number of renters and the uncertain rental speed indicated by the missing DOM data. Landlords and small-portfolio investors should consider these factors when evaluating potential investments in ZIP 55390.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.