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 | $1,440 |
| 1 Bedroom | $1,630 |
| 2 Bedrooms | $1,980 |
| 3 Bedrooms | $2,590 |
| 4 Bedrooms | $2,900 |
| 5 Bedrooms | $3,364 |
| 6 Bedrooms | $3,768 |
| 7 Bedrooms | $4,069 |
| 8 Bedrooms | $4,272 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,630 | $137,190 | 1.19% | B |
| 2BR | $1,980 | $247,610 | 0.8% | D |
| 3BR | $2,590 | $368,295 | 0.7% | D |
| 4BR | $2,900 | $447,534 | 0.65% | D |
| 5BR | $3,364 | $526,103 | 0.64% | D |
U.S. Census Bureau data (2024)
To determine if you should buy in ZIP code 55408 (Minneapolis, MN) for Section 8 investment, follow this decision tree based on the provided data.
1) Does FMR ($1770) clear debt service on a $286,481 property?
Yes: If your debt service (mortgage payments, taxes, insurance, and maintenance) is less than $1770 per month, then the Fair Market Rent (FMR) covers your costs. This makes the property financially viable under Section 8.
No: If your debt service exceeds $1770 per month, the FMR does not cover your expenses. Investing in this area for Section 8 would be unprofitable.
It Depends: If your debt service is close to $1770, you must consider potential increases in FMR or decreases in debt service costs. Analyze historical trends and future projections to make an informed decision.
2) Is market rent ($1,454 ZORI) above, at, or below FMR?
Above FMR: If the Zillow Observed Rental Index (ZORI) is higher than the FMR, market conditions favor higher rents. However, this means that Section 8 tenants might find it difficult to afford the rent, leading to lower occupancy rates.
At FMR: If the ZORI matches the FMR, market conditions align well with Section 8. This scenario offers stable occupancy and income.
Below FMR: If the ZORI is lower than the FMR, market conditions are favorable for Section 8 investments. Tenants will easily afford the rent, ensuring high occupancy rates.
3) Are 76.4% renters + N/A-day DOM enough demand?
Yes: With 76.4% of the population being renters, there is strong demand for rental properties. If the days on market (DOM) is low or non-existent, it indicates quick turnover and high interest in rentals.
No: If the DOM is high, indicating slow turnover, despite the 76.4% renter rate, there is insufficient demand for your property. Consider other areas with lower renter rates but faster DOM.
It Depends: If the DOM is moderate, the decision hinges on your ability to manage and maintain a property in a high-renter-rate area. The high percentage of renters suggests a market where demand could increase with the right property management practices.
In summary, ZIP 55408 can be a good Section 8 investment if the FMR clears your debt service, market rent is below or at FMR, and the high renter rate is coupled with fast DOM. Analyze these factors carefully before making a purchase decision.
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.