Location: Bismarck, ND | Metro: Bismarck, ND MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $870 |
| 1 Bedroom | $930 |
| 2 Bedrooms | $1,090 |
| 3 Bedrooms | $1,510 |
| 4 Bedrooms | $1,710 |
| 5 Bedrooms | $1,984 |
| 6 Bedrooms | $2,222 |
| 7 Bedrooms | $2,400 |
| 8 Bedrooms | $2,520 |
U.S. Census Bureau data (2024)
In ZIP code 58566, the Section 8 economics are straightforward but require careful consideration for landlords and small-portfolio investors. The SAFMR (Small Area Fair Market Rent) for a two-bedroom apartment in this specific ZIP code for FY 2024 is set at $940. This figure is crucial because it represents the maximum amount the housing authority will pay for a two-bedroom unit under the Section 8 program.
The SAFMR is the benchmark used to determine the rental assistance payment standard. If the local market rent is not provided, it implies that the SAFMR serves as the guideline for setting rents in this area. Landlords should ensure their rental rates do not exceed this amount to avoid losing tenants who rely on vouchers.
A voucher payment under Section 8 consists of two parts: the subsidy paid by the housing authority and the tenant's portion, which is typically 30% of their adjusted income. For a two-bedroom unit priced at $940, the tenant would be responsible for their share, and the housing authority would cover the rest, up to the SAFMR limit.
To illustrate, if a tenant's monthly income is $1,500, their contribution would be $450 (30% of $1,500). Therefore, the housing authority would subsidize the remaining $490 ($940 - $450). However, if the tenant's income were lower, say $1,000, their contribution would drop to $300 (30% of $1,000), leaving the housing authority to subsidize $640 ($940 - $300).
Note that utility allowances are also factored into the total payment. These allowances vary but generally add a few hundred dollars to the overall subsidy. It's important for landlords to understand these components to manage expectations regarding rental income.
In ZIP 58566, given the SAFMR of $940, landlords can expect a reimbursement gap or surplus depending on the tenant's income. For instance, with a tenant contributing $450 based on a $1,500 income, the landlord would receive $940 in total, including the housing authority subsidy and the tenant's share. If the market rent were higher than $940, the landlord would face a reimbursement gap, needing to adjust their pricing strategy accordingly.
Conversely, if the market rent is lower than $940, landlords might see a surplus where the voucher amount exceeds the actual rent, leading to potential additional income. However, since the local market rent is listed as N/A, it's critical for landlords to research current rental prices in the area to accurately gauge the reimbursement gap or surplus.
In summary, the economics of Section 8 in ZIP 58566 revolve around the SAFMR of $940, which sets the maximum subsidy. Landlords must account for the tenant's 30% income contribution and any utility allowances when determining their net income from a voucher tenant. The reimbursement gap or surplus hinges on the actual market rent compared to the SAFMR, making thorough local market research essential.
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.