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 | $1,140 |
| 1 Bedroom | $1,280 |
| 2 Bedrooms | $1,560 |
| 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 |
|---|---|---|---|---|
| 1BR | $1,280 | $146,486 | 0.87% | C |
| 2BR | $1,560 | $277,270 | 0.56% | F |
| 3BR | $2,040 | $345,386 | 0.59% | F |
| 4BR | $2,280 | $377,019 | 0.6% | D |
| 5BR | $2,645 | $396,499 | 0.67% | D |
U.S. Census Bureau data (2024)
The Section 8 market analysis for ZIP code 55407 in Minneapolis, MN, reveals a competitive yet manageable landscape for landlords and small-portfolio investors. The HUD Fair Market Rent (FMR) for this area is set at $1510 for the fiscal year 2024, while the market rent, as measured by Zillow's ZORI index, stands at $1535. This indicates that voucher tenants will generally cashflow marginally at the FMR rate, given the slight discrepancy between the two figures.
To further understand the investment potential, we can examine the rent-to-price ratio using the median home value of $314,349. With an average monthly rent of $1535, the annual rent would be approximately $18,420, leading to a rent-to-price ratio of about 5.86%. This ratio suggests that rental income represents a modest portion of the total property value, indicating that appreciation or stability might be stronger investment angles compared to pure cashflow.
The dynamics of the rental market versus the buying market also play a role in investment decisions. In ZIP 55407, the median days on market (DOM) for rentals is 20 days, which is relatively quick, suggesting strong demand. Additionally, only 0.2% of listings experience a price cut, indicating that landlords have little need to reduce their asking rents to attract tenants. This points towards a stable rental market where properties can maintain their value and occupancy rates effectively.
In conclusion, while cashflow is present but marginal for voucher tenants at the HUD FMR, the strength of the rental market and the low incidence of price cuts suggest that stability is the strongest investor angle in ZIP 55407. This stability provides a reliable source of income and reduces the risks associated with fluctuating rental markets.
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.