Section 8 Fair Market Rent (FMR) for ZIP 56634 - 2027

FY 2027 Fair Market Rent Rates

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

A decision tree for considering ZIP 56634 for Section 8 investments involves three key steps.

Step 1: Can the Fair Market Rent (FMR) of $910 cover the debt service on a property valued at $258,756?

• Yes: The FMR of $910 is sufficient to clear the debt service on a $258,756 property. This means that if you can secure a property at this price point, the rental income will meet your financial obligations.
• No: The FMR of $910 is not enough to cover the debt service on a property valued at $258,756. In this case, purchasing such a property would be financially unwise unless you can significantly reduce costs or increase the FMR through other means.

Step 2: How does the market rent of $754 compare to the FMR?

• Market Rent Above FMR: If the market rent were higher than the FMR, it would indicate a strong local rental market. However, in ZIP 56634, the market rent is below the FMR at $754. This suggests that the local rental market may struggle to support the higher FMR rates, which could lead to difficulties in finding tenants willing to pay the FMR.
• Market Rent At or Below FMR: With the market rent at $754, which is below the FMR, landlords might face challenges attracting tenants who can afford the FMR rate. This could affect occupancy rates and overall profitability.

Step 3: Is there sufficient demand with 21.6% of residents being renters and the days on the market (DOM) status?

• It Depends: The rental population of 21.6% indicates a moderate level of demand. However, the lack of data on days on the market (DOM) makes it difficult to assess how quickly properties are rented out. A high DOM would suggest weak demand, while a low DOM would indicate strong demand. Without this information, the decision hinges on other factors such as property management costs and local competition.

In summary, if the FMR of $910 covers the debt service on a $258,756 property and the local rental market supports higher rents, then ZIP 56634 could be a viable option for Section 8 investments. However, given the current market rent of $754, landlords must carefully evaluate the potential for achieving FMR rates. Lastly, the moderate rental population of 21.6% requires additional investigation into the speed of property turnover to make an informed decision.

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.