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 | $820 |
| 1 Bedroom | $910 |
| 2 Bedrooms | $1,170 |
| 3 Bedrooms | $1,620 |
| 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: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,620 | $360,857 | 0.45% | F |
| 4BR | $1,720 | $440,478 | 0.39% | F |
U.S. Census Bureau data (2024)
The Section 8 thesis in ZIP code 56314 is centered around the significant disparity between the Fair Market Rent (FMR) set at $1070 for fiscal year 2024 and the actual market rent reported at $775 according to the Census ACS data. This gap amounts to $295, or approximately 38%, which is a substantial difference indicating a potential yield play for landlords and small-portfolio investors.
The higher FMR compared to the market rent means that voucher tenants can afford to pay more than what the typical market demands. In ZIP 56314, where only 8.8% of the population are renters, the demand for rental properties is relatively low. However, the presence of Section 8 voucher holders can offset this by providing a steady stream of income guaranteed by the government, up to the FMR limit. This makes it an attractive investment opportunity as landlords can receive a higher rent payment than the open-market rate, thereby increasing their yield.
Moreover, the median home value in ZIP 56314 is $350,590, and the median income stands at $95,972. These figures suggest that homeownership is more prevalent and financially feasible for many residents, further reducing competition for rental properties. Consequently, landlords who participate in the Section 8 program can benefit from a niche market that might otherwise struggle to find suitable tenants willing to pay the lower market rents.
In summary, the gap between the FMR and the market rent in ZIP 56314 creates an environment where voucher tenants can be leveraged to enhance rental yields. With the government backing the rent payments up to $1070, landlords can secure higher returns than the average market rent of $775, making this a strategic investment for those looking to capitalize on the Section 8 program's benefits.
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.