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 | $1,850 |
| 1 Bedroom | $1,970 |
| 2 Bedrooms | $2,220 |
| 3 Bedrooms | $2,850 |
| 4 Bedrooms | $3,260 |
| 5 Bedrooms | $3,782 |
| 6 Bedrooms | $4,236 |
| 7 Bedrooms | $4,575 |
| 8 Bedrooms | $4,804 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,220 | $331,530 | 0.67% | D |
| 3BR | $2,850 | $516,557 | 0.55% | F |
| 4BR | $3,260 | $757,213 | 0.43% | F |
| 5BR | $3,782 | $1,004,865 | 0.38% | F |
U.S. Census Bureau data (2024)
The Section 8 thesis in ZIP code 60048, specifically in Libertyville, IL, centers around the discrepancy between the Fair Market Rent (FMR) and the actual market rent. For fiscal year 2024, the FMR stands at $2060, while the Zillow Observed Rent Index (ZORI) indicates a market rent of $2406. This creates a gap of $346, which represents a 16.8% difference between what the government deems fair and what the open market demands.
In Libertyville, where only 15.6% of residents are renters, the high median home value of $608,247 suggests a preference for homeownership. However, the median income of $173,975 means that rental properties must be priced competitively to attract tenants. The FMR being lower than the market rent implies that landlords who accept Section 8 vouchers will be renting their units below the prevailing market rate, potentially reducing their profit margins.
This scenario makes it a challenge to achieve a high yield on investment when relying solely on Section 8 vouchers. Landlords must consider the additional administrative burden and the potential for slower rent increases compared to the open market. While the guaranteed income from the government can provide stability, the cost of housing voucher tenants below open-market rates can impact overall returns.
To illustrate, if a landlord has a property that could rent for $2406 on the open market but accepts a Section 8 tenant paying only $2060, they are foregoing $346 per month, or about $4152 annually. This shortfall needs to be balanced against the benefits of having a stable tenant and the broader economic context of Libertyville.
In conclusion, the analysis in Libertyville highlights the need for landlords to carefully weigh the advantages and disadvantages of accepting Section 8 vouchers. The gap between FMR and market rent underscores the financial trade-offs involved in choosing to house voucher tenants rather than seeking open-market rents.
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.