Location: Steele County, MN | Metro: Rochester, MN 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 | $1,010 |
| 1 Bedroom | $1,080 |
| 2 Bedrooms | $1,270 |
| 3 Bedrooms | $1,770 |
| 4 Bedrooms | $2,130 |
| 5 Bedrooms | $2,471 |
| 6 Bedrooms | $2,768 |
| 7 Bedrooms | $2,989 |
| 8 Bedrooms | $3,138 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,270 | $212,232 | 0.6% | F |
| 3BR | $1,770 | $256,200 | 0.69% | D |
| 4BR | $2,130 | $301,007 | 0.71% | D |
U.S. Census Bureau data (2024)
ZIP 55917, located in Blooming Prairie, MN, within the Steele County metro area, serves as a strong cash-flow anchor for a Section 8 portfolio strategy. This designation is based on the significant spread between the Fair Market Rent (FMR) set by HUD for fiscal year 2024 and the local market rents.
The HUD FMR for a one-bedroom unit in ZIP 55917 for FY 2024 is set at $1110. In contrast, the current market rent for a similar unit is priced at $907. This means that landlords participating in the Section 8 program can expect to receive a higher rent payment than what they would typically collect from private market tenants, thus providing a stable and above-average cash flow.
The median home value in ZIP 55917 is $266,045, which indicates a relatively affordable housing market. The combination of a lower median home value and a higher FMR makes this ZIP code particularly attractive for Section 8 landlords. It ensures that the rental payments received will cover mortgage costs, maintenance, and other expenses with a margin left over for profit.
While ZIP 55917 does not offer immediate potential for rapid price appreciation, given the lack of data on price-cut shares and days on market (DOM), it still holds value as a steady cash-flow generator. The 10.8% renter share suggests that while not all residents are renters, there is a sufficient demand for rental properties to support a Section 8 portfolio. Additionally, the median income of $75,208 provides further evidence of the financial stability of the local population, reducing the risk of default or non-payment.
In conclusion, ZIP 55917 should be considered a cash-flow anchor within a Section 8 portfolio strategy. The substantial difference between the HUD FMR and the actual market rent, combined with a stable local economy, makes it an excellent choice for landlords seeking consistent and reliable income from their investment properties.
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.