Location: St. Cloud, 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 | $840 |
| 2 Bedrooms | $1,090 |
| 3 Bedrooms | $1,450 |
| 4 Bedrooms | $1,720 |
| 5 Bedrooms | $1,995 |
| 6 Bedrooms | $2,234 |
| 7 Bedrooms | $2,413 |
| 8 Bedrooms | $2,534 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,090 | $311,588 | 0.35% | F |
| 3BR | $1,450 | $382,989 | 0.38% | F |
| 4BR | $1,720 | $424,699 | 0.4% | F |
U.S. Census Bureau data (2024)
The Section 8 thesis in ZIP code 56310, located in Avon, Minnesota, is centered around the discrepancy between the Fair Market Rent (FMR) and the actual market rent. For fiscal year 2024, the FMR is set at $960, whereas the Census ACS reports the market rent to be $1,064. This creates a gap of $104, or approximately 10.8%, between what landlords can charge under the Section 8 program and the prevailing market rates.
Given that the FMR is lower than the market rent, it's important to understand the implications for landlords and small-portfolio investors. Housing voucher tenants typically pay only a portion of their income towards rent, with the remainder subsidized by the government. In Avon, where the median income is $105,164, the average tenant might contribute roughly 30% of their income, or about $262 per month. This means landlords would receive a total of $960 from both the tenant and the voucher program, falling short of the market rent by $104.
This shortfall represents a direct financial impact for landlords who choose to participate in the Section 8 program. It means they will be receiving less rent than what could potentially be earned in the open market. However, there are strategic advantages to consider. The median home value in Avon is $386,035, indicating a relatively stable housing market. With only 14.3% of residents being renters, the competition for rental properties is likely to be lower, making it easier to maintain occupancy rates with Section 8 tenants.
In conclusion, while the FMR is $104 below the market rent in ZIP 56310, the decision to accept Section 8 tenants should be made with an understanding of the local housing dynamics. The stable home values and low percentage of renters suggest that maintaining a steady stream of income through the Section 8 program is a viable strategy, despite the lower rents compared to the open market.
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.