Location: Norman County, MN | Metro: Fargo, ND-MN MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $910 |
| 1 Bedroom | $940 |
| 2 Bedrooms | $1,230 |
| 3 Bedrooms | $1,470 |
| 4 Bedrooms | $1,630 |
| 5 Bedrooms | $1,891 |
| 6 Bedrooms | $2,118 |
| 7 Bedrooms | $2,287 |
| 8 Bedrooms | $2,401 |
U.S. Census Bureau data (2024)
The Section 8 thesis for ZIP code 56584 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 $980, while the Census American Community Survey (ACS) reports the market rent at $764. This creates a significant gap of $216, or 22%, where the FMR exceeds the market rent.
In this scenario, landlords and small-portfolio investors can leverage the higher FMR to achieve better yields. Voucher tenants, who receive government subsidies to cover a portion of their rent, will pay the full FMR of $980. This means that the rental income generated from these tenants is higher than what the average market tenant would pay, which is $764. As a result, properties in ZIP 56584 can be more profitable when occupied by voucher tenants compared to those rented at market rates.
The attractiveness of this strategy is further supported by the local demographic context. In ZIP 56584, only 19.3% of residents are renters, indicating a relatively low demand for rental housing. The median home value stands at $161,245, suggesting that homeownership is prevalent and affordable. Additionally, the median household income of $69,625 provides insight into the economic status of the area's residents, many of whom might find it challenging to afford higher rents without assistance.
Given these conditions, the higher FMR can serve as a reliable income stream for landlords, as it is guaranteed by the government and is not subject to the fluctuations of the open market. This makes ZIP 56584 an attractive location for those looking to invest in Section 8 properties, as they can expect steady and potentially above-average returns on their investments.
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.