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 | $2,240 |
| 1 Bedroom | $2,380 |
| 2 Bedrooms | $2,690 |
| 3 Bedrooms | $3,460 |
| 4 Bedrooms | $3,950 |
| 5 Bedrooms | $4,582 |
| 6 Bedrooms | $5,132 |
| 7 Bedrooms | $5,543 |
| 8 Bedrooms | $5,820 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,690 | $380,188 | 0.71% | D |
| 3BR | $3,460 | $452,028 | 0.77% | D |
| 4BR | $3,950 | $560,960 | 0.7% | D |
| 5BR | $4,582 | $635,724 | 0.72% | D |
U.S. Census Bureau data (2024)
The Section 8 cap-rate picture for ZIP 60124 in Elgin, IL, reveals some interesting dynamics when comparing the Federal Market Rent (FMR) and the Zillow Observed Rental Index (ZORI).
The annualized Fair Market Rent (FMR) for a two-bedroom property in ZIP 60124 for fiscal year 2024 is $2570 per month. This translates into an annual rental income of $30,840. Given the median home value in the area is $494,707, the implied gross yield for a property rented at the FMR would be approximately 6.24%. This calculation is derived by dividing the annual rental income by the median home value.
On the other hand, the market rent as indicated by the ZORI is $2,327 per month. When annualized, this amounts to an annual rental income of $27,924. Using the same median home value, the gross yield based on the ZORI would be roughly 5.65%.
Considering the 7.6% renter density and the 12-day days on market (DOM), the scenario based on ZORI appears more realistic. The lower DOM suggests that properties are being rented out relatively quickly, which aligns with the market rent rather than the higher FMR. Additionally, the FMR tends to be set at levels that are more generous to tenants, making it less likely to reflect the actual market conditions accurately.
In conclusion, while the FMR provides a gross yield of 6.24%, the market-based ZORI indicates a more practical gross yield of 5.65%. For investors looking to understand the potential returns in ZIP 60124, the ZORI-based figure should be considered more reliable given the local rental market conditions.
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.