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 | $1,350 |
| 1 Bedroom | $1,520 |
| 2 Bedrooms | $1,850 |
| 3 Bedrooms | $2,420 |
| 4 Bedrooms | $2,710 |
| 5 Bedrooms | $3,144 |
| 6 Bedrooms | $3,521 |
| 7 Bedrooms | $3,803 |
| 8 Bedrooms | $3,993 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,520 | $181,326 | 0.84% | C |
| 2BR | $1,850 | $292,409 | 0.63% | D |
| 3BR | $2,420 | $363,584 | 0.67% | D |
| 4BR | $2,710 | $419,156 | 0.65% | D |
| 5BR | $3,144 | $480,395 | 0.65% | D |
U.S. Census Bureau data (2024)
The economics of Section 8 housing in ZIP code 55418, located in Minneapolis, MN, and part of Hennepin County, are governed by specific financial metrics. The SAFMR (Site Adjusted Fair Market Rent) for a two-bedroom apartment in this ZIP code is set at $1490 per month for fiscal year 2024. This SAFMR reflects the rental rate tailored specifically to this ZIP code, taking into account local housing conditions and costs.
In contrast, the local market rent for a two-bedroom unit, as indicated by ZORI (Zillow Observed Rental Index), stands at $1745 per month. This figure represents the average rent charged for similar properties in the area, without any adjustments or subsidies.
When a landlord participates in the Section 8 program, they receive reimbursement from the Housing Choice Voucher Program for the difference between the market rent and the SAFMR. However, the total reimbursement also includes the tenant's portion of the rent and utility allowances. The tenant is required to pay 30% of their adjusted income towards rent, which is then supplemented by the voucher payment to cover the SAFMR.
For example, if a tenant's portion is calculated to be $450 based on their income, the voucher would cover the remaining amount up to the SAFMR of $1490. This means the voucher would pay $1040 ($1490 - $450) directly to the landlord. Utility allowances vary but are typically around $150-$200 per month, depending on the household size and local energy costs. These allowances are paid directly to the tenant to help cover their utility expenses.
The reimbursement gap for landlords in ZIP 55418, when considering the local market rent of $1745, is evident. After receiving the voucher payment of $1490, landlords would fall short of the market rent by $255 per month for a two-bedroom unit. This gap is a critical consideration for landlords deciding whether to participate in the Section 8 program, as it represents a direct reduction in their potential rental income compared to the market rates.
To summarize, landlords in ZIP 55418 who accept Section 8 vouchers will receive a monthly reimbursement of $1490 for a two-bedroom apartment, with the tenant paying an additional $450 based on their income. Utility allowances are separate and do not affect the landlord's reimbursement. Given the local market rent of $1745, landlords should expect a reimbursement shortfall of $255 per month for a two-bedroom unit.
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.