Section 8 Fair Market Rent (FMR) for ZIP 56149 - 2027

FY 2027 Fair Market Rent Rates

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

A decision tree for evaluating whether to purchase properties in ZIP code 56149 for Section 8 investment hinges on three key factors: Fair Market Rent (FMR), market rent, and rental demand. Let's break down these considerations.

1) Does FMR of $990 (metro FY 2026) cover the debt service on a $210,550 property?

• Yes: If the FMR can support the monthly mortgage payments and other expenses, then the property is financially viable under Section 8. To determine this, calculate the total monthly debt service, including principal, interest, taxes, insurance, and maintenance costs. If this amount is less than or equal to $990, the answer is yes. For instance, if the monthly mortgage payment is $750, plus $100 for taxes and insurance, plus $50 for maintenance, totaling $900, then the FMR comfortably covers the debt service.
• No: If the total monthly debt service exceeds $990, the property will not be financially sustainable under Section 8 without additional subsidies or rent supplements.

2) Is the market rent of $548 (Census ACS) above, at, or below the FMR?

• Above: If the market rent is higher than the FMR, it suggests that there is potential for higher rents outside of Section 8. However, for Section 8 purposes, the relevant figure is the FMR, which caps the allowable rent.
• At or Below: If the market rent is at or below the FMR, it aligns well with the program's guidelines and ensures that tenants can afford their portion of the rent.

3) Are 20.1% renters and the days on market (DOM) sufficient to indicate demand?

• Yes: With 20.1% of the population renting, there is a decent level of demand for rental housing. This percentage is important because it reflects the proportion of potential Section 8 tenants. Additionally, if the DOM is low, it signifies that rental properties are being occupied quickly, indicating strong demand.
• No: If the DOM is high, it suggests that there is weak demand for rental properties, even with a 20.1% rental rate. High DOM could mean that properties are taking longer to fill, reducing the financial viability of an investment.
• It Depends: The exact threshold for DOM varies, but generally, if it is moderate, the demand is considered stable. A moderate DOM would suggest that while there is demand, it may not be as robust as in areas with lower DOM figures.

In summary, if the FMR of $990 covers the debt service on a $210,550 property, the market rent of $548 is at or below the FMR, and the 20.1% rental rate combined with a reasonable DOM indicates sufficient demand, then the answer is yes, you should consider buying in ZIP code 56149 for Section 8 investment. If any of these conditions are not met, further analysis is required before making a decision.

Data Sources: FMR data from HUD (2027). 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.