Location: Todd County, MN | Metro: Morrison 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 | $710 |
| 1 Bedroom | $790 |
| 2 Bedrooms | $1,010 |
| 3 Bedrooms | $1,410 |
| 4 Bedrooms | $1,490 |
| 5 Bedrooms | $1,728 |
| 6 Bedrooms | $1,935 |
| 7 Bedrooms | $2,090 |
| 8 Bedrooms | $2,195 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,410 | $289,635 | 0.49% | F |
| 4BR | $1,490 | $333,090 | 0.45% | F |
U.S. Census Bureau data (2024)
The economics of Section 8 housing in ZIP code 56475 are straightforward. The SAFMR (Standard Area Fair Market Rent) for a two-bedroom apartment is set at $970 per month for fiscal year 2026. This figure is specifically tailored for this ZIP code, ensuring it reflects the local rental market conditions accurately.
However, the local market rent for a similar two-bedroom unit is currently lower, at $817 per month, according to the latest Census ACS data. This discrepancy can be significant for landlords when deciding whether to accept Section 8 tenants.
A landlord should understand that a voucher does not cover the entire rent amount. Instead, it pays the difference between the market rent and the tenant's portion, which is typically 30% of their income. For simplicity, let's assume the tenant's portion is exactly 30% of the SAFMR. In this case, the tenant would pay $291 per month towards the rent ($970 x 0.30).
The voucher then covers the remaining rent, which in this scenario would be $679 per month ($970 - $291). However, landlords need to consider that the voucher payment also includes utility allowances. These allowances vary but are designed to help cover the cost of utilities for the tenant. If we factor in an average utility allowance of $150 per month, the total reimbursement a landlord might receive from the voucher program would be around $829 per month ($679 + $150).
This means that for a two-bedroom apartment priced at the SAFMR of $970, a landlord would receive a total of $829 from the voucher program plus the tenant's contribution of $291, summing up to the full SAFMR amount. However, if the local market rent is $817, accepting a Section 8 tenant at the SAFMR would result in a surplus for the landlord, as the voucher reimbursement would still be based on the higher SAFMR rate.
To illustrate, if a landlord rents out a two-bedroom unit at the local market rate of $817, they would receive the full $817 from the voucher program and the tenant, even though the voucher is calculated based on the higher SAFMR of $970. This results in a surplus of $153 per month for the landlord ($970 - $817).
In summary, landlords in ZIP 56475 can expect a surplus when renting to Section 8 tenants at the local market rate, due to the higher SAFMR used to calculate voucher payments. This surplus provides a financial cushion and makes Section 8 participation attractive for landlords looking to secure stable tenancy without compromising on 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.