Location: Chicago-Joliet-Naperville, IL | Metro: Chicago-Joliet-Naperville, IL HUD Metro FMR Area
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 | $1,910 |
| 1 Bedroom | $2,030 |
| 2 Bedrooms | $2,290 |
| 3 Bedrooms | $2,940 |
| 4 Bedrooms | $3,360 |
| 5 Bedrooms | $3,898 |
| 6 Bedrooms | $4,366 |
| 7 Bedrooms | $4,715 |
| 8 Bedrooms | $4,951 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,290 | $256,343 | 0.89% | C |
| 3BR | $2,940 | $334,996 | 0.88% | C |
| 4BR | $3,360 | $449,877 | 0.75% | D |
| 5BR | $3,898 | $536,486 | 0.73% | D |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP 60046 (Lindenhurst, IL) reveals interesting insights into the potential returns for landlords and small-portfolio investors. To start, we annualize the Fair Market Rent (FMR) for a 2-bedroom unit at $1910 per month, which translates to an annual rental income of $22,920. The Zillow Observed Rent Index (ZORI) for a 2-bedroom unit stands at $2,229 per month, equating to an annual rental income of $26,748.
Using the median home value of $347,418, we can calculate the implied gross yield for both the FMR and ZORI scenarios. For the FMR scenario, the gross yield is approximately 6.6%, while for the ZORI scenario, it is around 7.7%. This indicates that the potential gross yield is higher when relying on market rents rather than FMRs.
Given the 15.8% renter density in Lindenhurst, it is important to note that the market conditions suggest a relatively low demand for rentals compared to owner-occupied properties. However, the 7-day Days on Market (DOM) statistic implies that rental units are being filled quickly, indicating strong local rental market dynamics despite the overall low renter density.
In light of these factors, the ZORI-based gross yield of 7.7% is more realistic. While the FMR provides a safety net for landlords participating in the Section 8 program, the actual market conditions support higher rental rates. Therefore, investors should expect to achieve a gross yield closer to 7.7% under normal market conditions, assuming they can secure tenants willing to pay market rates.
To summarize, the Section 8 cap-rate for ZIP 60046 leans towards a gross yield of about 7.7% based on market rents, rather than the lower 6.6% based on FMRs. This higher yield reflects the quicker absorption rate of rental units in the area, as evidenced by the 7-day DOM, and aligns with the observed rental market trends in Lindenhurst.
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.