Location: Duluth, MN | Metro: Duluth, MN-WI MSA
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 | $770 |
| 1 Bedroom | $890 |
| 2 Bedrooms | $1,110 |
| 3 Bedrooms | $1,530 |
| 4 Bedrooms | $1,870 |
| 5 Bedrooms | $2,169 |
| 6 Bedrooms | $2,429 |
| 7 Bedrooms | $2,623 |
| 8 Bedrooms | $2,754 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,530 | $222,494 | 0.69% | D |
U.S. Census Bureau data (2024)
Duluth, MN-WI MSA metro's ZIP code 55765 presents a strong opportunity for inclusion within a Section 8 portfolio strategy, particularly as a cash-flow anchor. The Federal Market Rent (FMR) for ZIP 55765 in fiscal year 2024 is set at $980. This figure represents the maximum rental amount that can be charged to tenants participating in the Section 8 program, ensuring a steady and reliable source of income for landlords.
The market rent for the same area is currently at $650, indicating a significant spread of $330 between the FMR and the typical market rate. This spread means that landlords can charge higher rents under the Section 8 program compared to what they might receive from non-subsidized tenants. Given the median home value in ZIP 55765 stands at $172,435, the potential for cash flow generation is substantial, especially when considering the lower risk associated with Section 8 tenants due to their guaranteed rental assistance payments.
ZIP 55765 does not present an immediate opportunity as an appreciation play, as there is no data available on the percentage change in home values or the days on market (DOM) for properties. However, this does not detract from its role as a cash-flow anchor, which is crucial for maintaining financial stability in a real-estate portfolio.
While ZIP 55765 could serve as a diversifier, given the 7.8% renter share and a median income of $75,272, the primary focus should remain on its cash-flow generating potential. The relatively low renter share suggests that the majority of residents own their homes, but the presence of a sizeable number of renters, combined with the guaranteed income from the Section 8 program, makes this ZIP code a valuable addition to any portfolio aimed at maximizing cash flow.
In summary, ZIP 55765 is best positioned as a cash-flow anchor within a Section 8 portfolio strategy, thanks to the favorable spread between the FMR and market rent, and the overall financial security it offers through the Section 8 program.
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.