Location: Kandiyohi County, MN | Metro: Kandiyohi County, MN
| Unit Size | Monthly FMR |
|---|---|
| Studio | $820 |
| 1 Bedroom | $830 |
| 2 Bedrooms | $1,010 |
| 3 Bedrooms | $1,410 |
| 4 Bedrooms | $1,700 |
| 5 Bedrooms | $1,972 |
| 6 Bedrooms | $2,209 |
| 7 Bedrooms | $2,386 |
| 8 Bedrooms | $2,505 |
U.S. Census Bureau data (2024)
The economics of Section 8 housing in ZIP code 56251 operate under specific financial guidelines that directly impact landlords and small-portfolio investors. For a two-bedroom apartment in this ZIP, the SAFMR (Small Area Fair Market Rent) for FY 2026 is set at $970. This figure represents the maximum amount that the government will pay towards the rental subsidy for a unit of this size.
Local market rents, however, stand at $787, according to the Census ACS. This lower figure is important because it indicates the average rent charged for similar units in the same area. Landlords might wonder how these numbers translate into actual payments received when a tenant uses a Section 8 voucher.
A Section 8 voucher works by covering the difference between the tenant's portion of the rent and the total rent charged. The tenant typically pays 30% of their income towards rent. In ZIP 56251, if the local market rent is below the SAFMR, the government will still pay up to the SAFMR limit, provided the landlord accepts the voucher. However, the total reimbursement includes the tenant’s portion plus any utility allowances.
To illustrate, assume a tenant's portion is calculated based on the lower local market rent of $787. Thirty percent of this would be approximately $236.10, which is what the tenant pays. The government then covers the remaining balance up to the SAFMR of $970. Thus, the landlord receives the full $970 per month, even though the market rent is lower.
Utility allowances can vary but are typically fixed amounts per bedroom. For a two-bedroom apartment, the allowance might be around $100-$150, depending on the region. These utilities are paid directly to the landlord, increasing the total reimbursement to about $1,070-$1,120 for a two-bedroom unit.
In ZIP 56251, the typical reimbursement gap or surplus for a two-bedroom apartment is a surplus. Given the market rent of $787, the landlord receives a higher payment than the local market rate due to the SAFMR being set at $970. This means landlords can expect to receive more than the typical market rent for units in this size category, making Section 8 vouchers a financially beneficial option in this specific ZIP code.
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.