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 | $1,740 |
| 1 Bedroom | $1,850 |
| 2 Bedrooms | $2,090 |
| 3 Bedrooms | $2,690 |
| 4 Bedrooms | $3,070 |
| 5 Bedrooms | $3,561 |
| 6 Bedrooms | $3,988 |
| 7 Bedrooms | $4,307 |
| 8 Bedrooms | $4,522 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,090 | $285,983 | 0.73% | D |
| 3BR | $2,690 | $375,362 | 0.72% | D |
| 4BR | $3,070 | $496,332 | 0.62% | D |
| 5BR | $3,561 | $569,944 | 0.62% | D |
U.S. Census Bureau data (2024)
The Section 8 program in ZIP code 60118, located in West Dundee, IL, presents a significant opportunity for landlords and small-portfolio investors, but it also comes with challenges due to the disparity between the Fair Market Rent (FMR) and the actual market rent. The FMR for ZIP 60118 for fiscal year 2024 is set at $1760, while the Zillow Observed Rent Index (ZORI), which reflects current market conditions, stands at $2313. This creates a gap of $553, or approximately 31%, between what the government will pay for a rental unit and what the market demands.
In West Dundee, where 32.3% of residents are renters, and the median home value is $404,364, the median household income of $106,912 suggests that many potential tenants may struggle to afford market rents without assistance. However, the lower FMR means that landlords who accept Section 8 vouchers will be receiving less than the market rate, which could impact their profitability.
The cost of housing voucher tenants below open-market rates can be substantial. Landlords must consider not only the immediate financial shortfall but also the long-term implications of accepting Section 8 vouchers. While the program guarantees timely rent payments through government subsidies, the reduced rent levels mean that landlords might have to manage properties at a lower profit margin. Additionally, the administrative burden and stricter maintenance standards associated with Section 8 properties can further affect the bottom line.
To illustrate, if a landlord has a two-bedroom apartment listed at $2313 per month, they would receive only $1760 under the Section 8 program, representing a loss of $553 per month. Over a year, this amounts to $6636 less than the market rent. Given the median home value and income levels in West Dundee, it's clear that landlords must weigh the benefits of guaranteed payments against the costs of lower rents and additional responsibilities.
In conclusion, the gap between the FMR and market rent in ZIP 60118 makes it a challenging environment for landlords looking to maximize their yields. Accepting Section 8 vouchers requires careful consideration of the financial and administrative trade-offs involved.
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.