Location: Yellow Medicine County, MN | Metro: Chippewa 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 | $890 |
| 2 Bedrooms | $1,130 |
| 3 Bedrooms | $1,480 |
| 4 Bedrooms | $1,640 |
| 5 Bedrooms | $1,902 |
| 6 Bedrooms | $2,130 |
| 7 Bedrooms | $2,300 |
| 8 Bedrooms | $2,415 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,480 | $190,783 | 0.78% | D |
U.S. Census Bureau data (2024)
The market analysis for Section 8 investors targeting ZIP code 56241 in Yellow Medicine County, MN, reveals a favorable environment for those seeking stable rental income. The HUD Fair Market Rent (FMR) for the metro area in fiscal year 2026 is set at $1,060. In comparison, the market rent based on Census ACS data is significantly lower at $863.
This discrepancy means that voucher tenants in ZIP 56241 will generally cashflow positively at the HUD FMR rate. Landlords can expect a strong positive cash flow from voucher tenants without needing to rely on premium units, which typically command higher rents. The median home value in the area is $181,557, leading to a rent-to-price ratio of approximately 0.5%, calculated by dividing the annualized market rent ($10,356) by the median home value.
Note that the data does not provide specifics on the median Days on Market (DOM) or the percentage of homes that experience price cuts. However, these metrics would be relevant if there were concerns about the rent-versus-buy dynamics affecting the local housing market. Given the current data, it's clear that the primary benefit for Section 8 investors lies in the robust cash flow potential, rather than speculative gains from appreciation or stability.
The strongest investor angle in ZIP 56241 is undoubtedly the cash flow, as the HUD FMR exceeds the market rent by a substantial margin, ensuring that voucher tenants will cover costs and provide a reliable source of income.
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.