Section 8 Fair Market Rent (FMR) for ZIP 56663 - 2027

FY 2027 Fair Market Rent Rates

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

To determine if a landlord should buy in ZIP code 56663 for Section 8 purposes, follow this decision tree based on the specific data points provided:

1) Does the Fair Market Rent (FMR) of $1,000 (for the metro area in fiscal year 2026) cover the debt service on a property?

• No: Do not purchase. The FMR of $1,000 does not clear the debt service, which means that even if you could fill your units with Section 8 tenants, you would not be able to meet your financial obligations.
• Yes: Proceed to the next question.

2) How does the market rent compare to the FMR?

• Above FMR: It depends. If the market rent is significantly higher than the FMR, then relying solely on Section 8 might limit your tenant pool. However, if you can attract non-Section 8 tenants willing to pay market rates, then it's feasible.
• At or Below FMR: Yes. This indicates that Section 8 rents are competitive with the market, making it a viable option for filling vacancies without significant loss.

3) Is there sufficient demand for Section 8 housing?

• 4.9% of renters are eligible for Section 8: It depends. This percentage alone suggests a limited demand. To make an informed decision, consider the Days on Market (DOM) for these units. A DOM of N/A days suggests either too little or too much data to draw conclusions.
• DOM is within a reasonable range: Yes. Assuming the DOM is not excessively high, the combination of 4.9% eligible renters and a manageable DOM indicates that there is enough demand to sustain Section 8 properties.
• DOM is excessively high: No. High DOM values suggest difficulty in finding tenants, even among those eligible for Section 8. This would likely result in prolonged vacancy periods and financial strain.

In summary, the decision to invest in ZIP code 56663 for Section 8 properties hinges on whether the FMR covers debt service, how market rents compare to the FMR, and the balance between the percentage of eligible renters and the time it takes to find tenants. Use these criteria to assess the feasibility of your investment.

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.