Location: Foster County, ND | Metro: Eddy County, ND
| Unit Size | Monthly FMR |
|---|---|
| Studio | $790 |
| 1 Bedroom | $790 |
| 2 Bedrooms | $1,010 |
| 3 Bedrooms | $1,410 |
| 4 Bedrooms | $1,700 |
| 5 Bedrooms | $1,972 |
| 6 Bedrooms | $2,209 |
| 7 Bedrooms | $2,386 |
| 8 Bedrooms | $2,505 |
U.S. Census Bureau data (2024)
The analysis of the Section 8 program in ZIP 58445, Grace City, North Dakota, reveals a significant gap between the Fair Market Rent (FMR) and the actual market rent. The FMR for the metro area for fiscal year 2026 is set at $870, while the current market rent is not available, suggesting that the FMR may be higher than the open-market rate. This scenario makes ZIP 58445 a yield play for landlords and small-portfolio investors.
The FMR exceeds the likely market rent, indicating that voucher tenants can offer a consistent and reliable income stream. In ZIP 58445, only 1.8% of residents are renters, and the median household income stands at $72,250. These figures suggest a predominantly owner-occupied market, which could lead to lower demand for rental properties and thus lower market rents. The lack of a median home value figure further supports the notion that the rental market may be underdeveloped.
Given the context of a low rental population and potentially depressed market rents, landlords who accept Section 8 vouchers can benefit from the government's guarantee of payment at the FMR rate. This ensures a steady cash flow, even if the market rent is lower. The FMR provides a benchmark that can help stabilize returns in an otherwise volatile rental environment.
However, accepting housing voucher tenants also comes with certain costs. Landlords must comply with HUD regulations, which can include regular inspections and maintenance requirements. Additionally, the process of leasing to voucher tenants can be more time-consuming due to the need for approval and documentation.
In summary, the gap between the FMR and the likely lower market rent in ZIP 58445 positions it as a favorable yield play for landlords willing to navigate the nuances of the Section 8 program. The consistent income from voucher tenants can offset the potential drawbacks of the program, making it a viable option for investment in this area.
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.