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 | $1,230 |
| 1 Bedroom | $1,390 |
| 2 Bedrooms | $1,690 |
| 3 Bedrooms | $2,210 |
| 4 Bedrooms | $2,470 |
| 5 Bedrooms | $2,865 |
| 6 Bedrooms | $3,209 |
| 7 Bedrooms | $3,466 |
| 8 Bedrooms | $3,639 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,690 | $194,398 | 0.87% | C |
| 3BR | $2,210 | $239,580 | 0.92% | C |
| 4BR | $2,470 | $267,390 | 0.92% | C |
| 5BR | $2,865 | $284,130 | 1.01% | B |
U.S. Census Bureau data (2024)
The rent math in ZIP code 55411, located in Minneapolis, MN, does not align favorably with the Section 8 program. The Fair Market Rent (FMR) set at $1360 for fiscal year 2024 is significantly below the market rent, which stands at $1,899 according to the Zillow Observed Rental Index (ZORI). This discrepancy means that landlords participating in Section 8 may face a shortfall of approximately $539 per unit, making it challenging to cover costs and maintain profitability solely through Section 8 payments.
Acquisition in this area is relatively affordable. The median home value is $241,709, indicating that purchasing property is within reach for many investors. Additionally, the average days on market (DOM) is 31 days, and only 0.2% of homes have been listed with a price reduction, suggesting a robust seller's market where homes sell quickly and at asking prices. These factors make it easier for investors to acquire properties without significant negotiation or waiting periods.
Tenant demand is strong in ZIP 55411. With a total population of 27,741, nearly half (47.3%) are renters. This high proportion of renters indicates a steady pool of potential tenants who are actively seeking housing options, including those eligible for Section 8 assistance. The combination of a large population and a high renter share ensures that there will be consistent interest in rental properties, even if they are part of the Section 8 program.
In conclusion, while the rent math does not favor Section 8 participation due to the substantial gap between the FMR and market rents, the affordability of acquisitions and the robust tenant demand present opportunities for strategic investment. Landlords should carefully consider their cost structures and seek ways to supplement income beyond just the Section 8 payments to ensure profitability. Despite the challenges, the strong rental market and ample number of eligible tenants suggest that with proper management, Section 8 properties can still be viable investments in ZIP 55411.
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.