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 | $1,440 |
| 1 Bedroom | $1,520 |
| 2 Bedrooms | $1,720 |
| 3 Bedrooms | $2,210 |
| 4 Bedrooms | $2,530 |
| 5 Bedrooms | $2,935 |
| 6 Bedrooms | $3,287 |
| 7 Bedrooms | $3,550 |
| 8 Bedrooms | $3,728 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,720 | $209,243 | 0.82% | C |
| 3BR | $2,210 | $246,586 | 0.9% | C |
| 4BR | $2,530 | $262,782 | 0.96% | C |
| 5BR | $2,935 | $277,652 | 1.06% | B |
U.S. Census Bureau data (2024)
Waukegan, Illinois (ZIP 60085) serves as the historic seat of Lake County and functions as a major employment hub along the Lake Michigan shoreline. The local economy is anchored by significant industrial and healthcare presences, with the sprawling Vista Health System serving as a top employer. The area features a revitalizing downtown district near the Genesee Theatre and the Waukegan Harbor, balancing older housing stock with new waterfront developments aimed at attracting professionals to the North Shore suburbs.
From a valuation perspective, the market shows a tight spread between subsidized and market rates. The FY2024 HUD SAFMR for a 2-bedroom unit sits at $1,480, while the projected FY2026 Full FMR increases slightly to $1,540. Current market rents (Zillow ZORI) for a 2-bedroom hover around $1,560, creating a modest gap of only $20 above the FY2026 standard. With a median home value of $227,688 and median 2BR sale prices at $198,509, entry prices are relatively accessible, though properties sit on the market for a median of 62 days, suggesting average liquidity.
The tenant pool is robust, driven by a renter share of 51.8% and a median household income of $66,793. This income level supports steady demand for housing vouchers, particularly as families seek access to the Waukegan Community Unit School District 60. The city’s location along the Metra Union Pacific/North Line offers direct commuter rail service to downtown Chicago, a critical amenity for working-class tenants and Section 8 holders relying on public transit to access broader regional employment opportunities.
The Section 8 verdict for Waukegan leans toward stability and cash-flow efficiency. While the $20 gap between the future $1,540 FMR and the $1,560 market rent limits premium pricing power, the lower acquisition cost of $198,509 for a 2-bedroom allows investors to achieve decent yield ratios without over-leveraging. The high renter population ensures consistent occupancy, making this a solid hold for investors prioritizing steady government-backed payments over rapid appreciation.
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.