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 | $1,150 |
| 1 Bedroom | $1,300 |
| 2 Bedrooms | $1,580 |
| 3 Bedrooms | $2,060 |
| 4 Bedrooms | $2,310 |
| 5 Bedrooms | $2,680 |
| 6 Bedrooms | $3,002 |
| 7 Bedrooms | $3,242 |
| 8 Bedrooms | $3,404 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,300 | $98,979 | 1.31% | A |
| 2BR | $1,580 | $273,137 | 0.58% | F |
| 3BR | $2,060 | $322,470 | 0.64% | D |
| 4BR | $2,310 | $362,975 | 0.64% | D |
| 5BR | $2,680 | $394,503 | 0.68% | D |
U.S. Census Bureau data (2024)
In ZIP code 55428, which encompasses New Hope, Minnesota in Hennepin County, the economics of Section 8 housing involve understanding the SAFMR (Small Area Fair Market Rent) and ZORI (Zillow Observed Rent Index) figures. For a two-bedroom apartment, the SAFMR for FY 2024 is set at $1470. This figure is specific to this ZIP code and reflects the fair market rent determined by the U.S. Department of Housing and Urban Development (HUD).
The local market rent, as indicated by the ZORI, is $1417. This suggests that the SAFMR is slightly above the average local market rent, providing landlords with a benchmark to ensure they are not undercharging for their properties when participating in the Section 8 program.
A voucher payment under Section 8 involves several components: the tenant's portion of the rent, the utility allowance, and the subsidy paid by the government. The tenant's portion is typically based on their income, with HUD guidelines stipulating that the tenant should pay approximately 30% of their adjusted monthly income towards rent. If we assume an average tenant income that aligns with the typical subsidy rates, the government would cover the remainder up to the SAFMR limit of $1470.
The utility allowance is a fixed amount per unit type, designed to help cover the cost of utilities. For a two-bedroom unit, this allowance can vary but is often around $300 to $400 annually. Therefore, if a landlord includes utilities in the rent, they must consider this additional allowance when calculating their total reimbursement.
To illustrate, if a tenant earns an income that requires them to pay $400 towards rent, the government would then subsidize the difference up to the SAFMR. In this case, the landlord would receive $1070 from the government ($1470 - $400), plus any applicable utility allowance. This ensures the landlord receives a total payment close to the SAFMR, though it may not always fully cover the costs associated with maintaining a rental property.
Given these parameters, landlords in ZIP 55428 can expect a reimbursement that closely matches the SAFMR of $1470. However, since the local market rent is $1417, there is a slight surplus of $53 for a two-bedroom unit. This surplus provides landlords with a margin that can be used to cover maintenance costs, property management fees, and other expenses associated with owning rental properties.
Landlords should also be aware that the actual reimbursement can vary based on the tenant's income and the specific terms of their voucher. It is important to consult with local housing authorities to understand the exact reimbursement rates for individual tenants.
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.