Location: Sioux City, IA | Metro: Sioux City, IA-NE-SD 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 | $970 |
| 1 Bedroom | $1,130 |
| 2 Bedrooms | $1,400 |
| 3 Bedrooms | $1,700 |
| 4 Bedrooms | $1,900 |
| 5 Bedrooms | $2,204 |
| 6 Bedrooms | $2,468 |
| 7 Bedrooms | $2,665 |
| 8 Bedrooms | $2,798 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,400 | $313,911 | 0.45% | F |
| 3BR | $1,700 | $379,354 | 0.45% | F |
| 4BR | $1,900 | $487,851 | 0.39% | F |
| 5BR | $2,204 | $608,841 | 0.36% | F |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP 57049, North Sioux City, SD, reveals some key insights into potential investment opportunities. The Fair Market Rent (FMR) for a 2-bedroom apartment in this area for FY 2024 is set at $1220 per month, while the Census ACS reports the market rent for a similar unit at $1,147 per month.
To annualize these figures, we multiply them by 12. For the FMR scenario, the annualized rental income would be $14,640 ($1220 x 12), and for the market rent scenario, it would be $13,764 ($1,147 x 12).
Given the median home value of $418,292, the implied gross yield for the FMR scenario is approximately 3.5%, calculated as $14,640 divided by $418,292. In contrast, the market rent scenario yields an implied gross yield of about 3.3%, calculated as $13,764 divided by $418,292.
While both scenarios provide a clear picture of the potential gross yield, the market rent figure is more likely to reflect reality. With a renter density of 37.3%, there is a significant portion of the population that could potentially be looking for rental housing. However, the fact that the days on market (DOM) is listed as N/A suggests either insufficient data or a highly efficient local real estate market where properties are rented quickly.
Investors should consider the FMR as a ceiling rather than a target, as it represents the maximum amount that can be charged under the Section 8 program. The actual rental income may be closer to the market rate, which is slightly lower. This means that while the FMR offers a higher gross yield, the market rent scenario is more practical for long-term investment planning.
To summarize, the gross yield based on FMR is 3.5%, and based on market rent, it is 3.3%. Given the local conditions, the market rent scenario is more realistic for investment purposes. Investors should use these figures as a starting point for their own calculations, taking into account the specific property's expenses and other factors to determine the net operating income (NOI).
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.