Location: Morrison County, MN | Metro: St. Cloud, MN MSA
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 | $830 |
| 2 Bedrooms | $1,090 |
| 3 Bedrooms | $1,450 |
| 4 Bedrooms | $1,690 |
| 5 Bedrooms | $1,960 |
| 6 Bedrooms | $2,195 |
| 7 Bedrooms | $2,371 |
| 8 Bedrooms | $2,490 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,090 | $273,260 | 0.4% | F |
| 3BR | $1,450 | $337,494 | 0.43% | F |
| 4BR | $1,690 | $403,264 | 0.42% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 56307 in Minnesota provides a clear view of potential rental yields based on the Fair Market Rent (FMR) and market rent data.
Using the annualized 2BR FMR of $910 for fiscal year 2024, the gross yield can be calculated. With a median home value of $355,966, the annualized FMR represents approximately 2.56% of the property's value. This is derived by multiplying the monthly FMR by 12 and dividing it by the median home value:
In contrast, using the market rent figure of $650 per month from the Census ACS, the gross yield is significantly lower at about 1.88%. The calculation is similar:
The implied gross-yield from the FMR scenario is higher at 2.56%, compared to the market rent scenario which stands at 1.88%. Given that 23.1% of the population in ZIP 56307 are renters, the market rent scenario appears more realistic. This lower renter density suggests that the majority of residents prefer homeownership, which could limit the pool of tenants willing to pay the higher FMR rates. Furthermore, the lack of Days on Market (DOM) data implies that there might be challenges in quickly renting out properties at the FMR rate, potentially leading to extended vacancy periods. Therefore, investors should consider the market rent of $650 per month as a more practical benchmark for calculating gross yields and making investment decisions in ZIP 56307.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.