Location: Jackson County, MN | Metro: Jackson County, MN
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 | $790 |
| 1 Bedroom | $1,030 |
| 2 Bedrooms | $1,130 |
| 3 Bedrooms | $1,480 |
| 4 Bedrooms | $1,490 |
| 5 Bedrooms | $1,728 |
| 6 Bedrooms | $1,935 |
| 7 Bedrooms | $2,090 |
| 8 Bedrooms | $2,195 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,480 | $220,195 | 0.67% | D |
U.S. Census Bureau data (2024)
A skeptical investor looking at ZIP code 56150 might have several concerns regarding the feasibility of investing in a Section 8 property here. Let's address these points directly using the available data.
Will Fair Market Rent (FMR) of $1,050 (metro FY 2026) cover the mortgage on a $204,170 home?
The FMR of $1,050 is the maximum amount that a landlord can charge for a Section 8 rental unit. To determine if this will cover the mortgage, we need to calculate the potential monthly mortgage payment based on the median home value of $204,170. Assuming a typical down payment of 20%, the loan amount would be around $163,336. With an average interest rate of 4% over a 30-year term, the estimated monthly mortgage payment would be approximately $780. This means the FMR of $1,050 would indeed cover the mortgage, leaving room for other expenses such as maintenance and property taxes.
Is there enough renter demand at 12.3%?
The 12.3% figure represents the percentage of households that rent in ZIP 56150. While this may seem low compared to national averages, it is important to note that the demand for affordable housing, especially among those eligible for Section 8 assistance, can be steady. The key is to ensure that the property meets the criteria for Section 8 eligibility and is well-maintained to attract tenants. Additionally, the local job market and population growth trends should be considered to gauge future demand. However, the data does not provide specifics on the number of Section 8 participants in the area, which would give a clearer picture of the actual demand for subsidized housing.
Will vouchers keep pace with $945 market rents?
The market rent of $945 is lower than the FMR of $1,050, indicating that the voucher amount is likely sufficient to cover the cost of renting a property at market rates. However, the concern remains whether the voucher amounts will continue to match the rising market rents. To accurately assess this, we would need historical data on how voucher amounts have changed relative to market rents in ZIP 56150. Unfortunately, the provided data does not offer this historical perspective, making it difficult to predict future trends with certainty.
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.