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 | $1,170 |
| 1 Bedroom | $1,330 |
| 2 Bedrooms | $1,610 |
| 3 Bedrooms | $2,100 |
| 4 Bedrooms | $2,360 |
| 5 Bedrooms | $2,738 |
| 6 Bedrooms | $3,067 |
| 7 Bedrooms | $3,312 |
| 8 Bedrooms | $3,478 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,330 | $183,308 | 0.73% | D |
| 2BR | $1,610 | $259,495 | 0.62% | D |
| 3BR | $2,100 | $309,673 | 0.68% | D |
| 4BR | $2,360 | $349,414 | 0.68% | D |
| 5BR | $2,738 | $385,986 | 0.71% | D |
U.S. Census Bureau data (2024)
The HUD Fair Market Rent (FMR) for ZIP code 55421, which encompasses Columbia Heights, MN, in the Minneapolis-St. Paul-Bloomington, MN-WI HUD Metro FMR Area, is set at $1510 for fiscal year 2024. In comparison, the market rent, measured by Zillow's ZORI index, stands at $1480. This indicates that voucher tenants would generally cashflow at the FMR rate, with a slight margin of about $30 per unit, suggesting that properties receiving the FMR subsidy would cover operating costs and provide a modest profit.
To derive the rent-to-price ratio, we can use the median home value of $297,790 in the area. The monthly rental cost of $1480 translates into an annual rental income of $17,760. Dividing the annual rental income by the median home value yields a rent-to-price ratio of approximately 6%, which is indicative of a stable rental market where property values are not significantly outpacing rental rates.
The median Days on Market (DOM) for rental listings is 45 days, and the share of listings that require a price cut is only 0.2%. These metrics suggest that the rental market in 55421 is relatively efficient, with few landlords needing to reduce their asking prices to attract tenants. This stability is beneficial for small-portfolio investors who rely on consistent cash flow from their properties.
The strong investor angle in this market is stability. Given the tight alignment between the HUD FMR and the actual market rent, combined with the low rate of price cuts required, investors can expect reliable and predictable returns from their rental investments in this area. This makes it particularly attractive for those seeking long-term, stable income streams without the volatility often associated with rapidly appreciating 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.