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 | $1,930 |
| 1 Bedroom | $2,040 |
| 2 Bedrooms | $2,310 |
| 3 Bedrooms | $2,970 |
| 4 Bedrooms | $3,390 |
| 5 Bedrooms | $3,932 |
| 6 Bedrooms | $4,404 |
| 7 Bedrooms | $4,756 |
| 8 Bedrooms | $4,994 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $2,040 | $165,101 | 1.24% | A |
| 2BR | $2,310 | $227,751 | 1.01% | B |
| 3BR | $2,970 | $372,169 | 0.8% | D |
| 4BR | $3,390 | $460,913 | 0.74% | D |
| 5BR | $3,932 | $518,900 | 0.76% | D |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 60169, Hoffman Estates, IL, reveals a significant gap between federally mandated Fair Market Rent (FMR) and the prevailing market rents. For a two-bedroom unit, the FMR set by HUD for FY 2024 is $1950 per month. In contrast, the Zillow Observed Rent Index (ZORI) indicates that market rents stand at $2020 per month.
To derive the cap rates, we must first annualize these figures. The annualized FMR for a two-bedroom unit would be $23,400 ($1950 x 12 months), while the annualized market rent would be $24,240 ($2020 x 12 months).
The median home value in ZIP 60169 is $340,177. Using this figure, the implied gross yield based on FMR is approximately 6.88%, calculated by dividing the annualized FMR by the median home value. Conversely, the gross yield based on market rent is slightly higher at 7.13%. These figures represent the potential income before deducting operating expenses and other costs associated with property management.
Given the 34.6% renter density and a 15-day Days on Market (DOM), it is evident that there is a steady demand for rental properties in the area. However, the reality of Section 8 participation often involves a trade-off between guaranteed tenancy and lower rent compared to market rates. While the market rent scenario yields a higher gross income, the actual performance of Section 8 properties tends to align more closely with the FMR due to the nature of the program and the subsidies involved.
In conclusion, while the market rent of $2020 suggests a gross yield of 7.13%, the more realistic scenario for Section 8 properties in ZIP 60169 is the gross yield of 6.88% based on the FMR of $1950. This analysis provides a clear picture of the potential income streams landlords can expect when participating in the Section 8 program in this region.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.