Section 8 Fair Market Rent (FMR) for ZIP 56002 - 2027

FY 2027 Fair Market Rent Rates

The economics of Section 8 in ZIP code 56002, located in Mankato County, Minnesota, are based on the SAFMR (Small Area Fair Market Rent) which is set specifically for this ZIP code. For a two-bedroom apartment, the SAFMR for FY 2024 is $1130. This figure represents the maximum amount that the housing authority will pay towards a tenant's rent subsidy.

To understand how this works for landlords, let's break down the components of a voucher payment. The tenant is responsible for paying 30% of their adjusted income toward the rent. If we assume an average adjusted income of $2000 per month for tenants in this area, the tenant would pay $600 toward the rent. The remainder of the rent, up to the SAFMR limit, is covered by the housing authority.

In the case of a $1130 SAFMR, if the tenant pays $600, the housing authority would cover the difference, which is $530. However, it's important to note that the actual reimbursement can vary depending on the tenant's income and the specific terms of their voucher.

Additionally, the housing authority provides utility allowances. These allowances are intended to help cover the cost of utilities such as electricity, gas, water, and garbage. The exact amount varies but is typically calculated based on the size of the unit and the number of occupants. For a two-bedroom apartment, the utility allowance might be around $200-$300 per month.

Given the SAFMR of $1130 and assuming a utility allowance of $250, the total monthly reimbursement a landlord could expect would be $780 ($600 tenant contribution + $530 housing authority contribution + $250 utility allowance). This leaves a potential reimbursement gap of $350 for landlords renting out a two-bedroom unit at the SAFMR rate, since the total SAFMR is $1130 and the combined payments from the tenant and the housing authority are $780.

The reimbursement gap or surplus depends on whether the market rent is above or below the SAFMR. Since the local market rent for a two-bedroom apartment in ZIP 56002 is currently unknown, landlords should compare their rental rates to the SAFMR of $1130 to determine if they will receive the full reimbursement or if there will be a shortfall.

In summary, for a two-bedroom apartment in ZIP 56002, landlords can expect a total reimbursement of $780 when the SAFMR is $1130 and the utility allowance is $250. This results in a reimbursement gap of $350, unless the market rent is lower than the SAFMR, in which case there would be no gap.

Data Sources: FMR data from HUD (2027).

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.