Location: McKenzie County, ND | Metro: Dunn County, ND
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 | $1,230 |
| 1 Bedroom | $1,240 |
| 2 Bedrooms | $1,620 |
| 3 Bedrooms | $2,110 |
| 4 Bedrooms | $2,710 |
| 5 Bedrooms | $3,144 |
| 6 Bedrooms | $3,521 |
| 7 Bedrooms | $3,803 |
| 8 Bedrooms | $3,993 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $2,110 | $381,175 | 0.55% | F |
U.S. Census Bureau data (2024)
The analysis of the Section 8 program in ZIP code 58854 reveals a significant opportunity for landlords and small-portfolio investors due to the disparity between the Fair Market Rent (FMR) and the market rent. The FMR for the area, as determined by the Department of Housing and Urban Development (HUD), stands at $1,400 per month for fiscal year 2026. In contrast, the actual market rent, measured by Zillow's ZORI index, is $1,289 per month. This indicates that the FMR exceeds the market rent by $111, or approximately 8.6%, providing a clear advantage for those who choose to participate in the Section 8 program.
The higher FMR compared to the market rent makes it a yield play for landlords. By accepting Section 8 vouchers, landlords can secure a consistent and reliable income stream that is above the prevailing market rate. This is particularly beneficial given the local rental market dynamics where 53.2% of residents are renters, indicating a high demand for affordable housing options. Additionally, the median home value of $376,897 suggests that homeownership is relatively expensive, further underscoring the importance of rental housing.
However, participating in the Section 8 program also comes with considerations regarding the cost of housing voucher tenants below open-market rates. Landlords must ensure that their properties meet HUD standards, which can involve maintenance and upgrade costs. Moreover, the administrative overhead associated with managing Section 8 tenants, such as processing applications and adhering to program guidelines, should be factored into the decision-making process.
In ZIP 58854, with a median income of $99,000, many residents may find it challenging to afford market-rate rents without assistance. Therefore, the Section 8 program serves as a critical support mechanism, enabling landlords to charge $111 more than the average market rent while still offering affordable housing to low-income families. This makes the ZIP code an attractive investment opportunity for those willing to navigate the nuances of the Section 8 program.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.