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 | $1,720 |
| 1 Bedroom | $1,820 |
| 2 Bedrooms | $2,060 |
| 3 Bedrooms | $2,650 |
| 4 Bedrooms | $3,030 |
| 5 Bedrooms | $3,515 |
| 6 Bedrooms | $3,937 |
| 7 Bedrooms | $4,252 |
| 8 Bedrooms | $4,465 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,060 | $323,382 | 0.64% | D |
| 3BR | $2,650 | $395,480 | 0.67% | D |
| 4BR | $3,030 | $607,252 | 0.5% | F |
| 5BR | $3,515 | $696,898 | 0.5% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP 60423 (Frankfort, IL) reveals significant differences between using the Fair Market Rent (FMR) and the actual market rent in calculating the implied gross yield. For a two-bedroom unit, the FMR for FY 2024 is set at $1810 per month, while the Zillow Observed Rental Index (ZORI) indicates a market rent of $2,340 per month.
Annualizing these figures against the median home value of $487,506 provides distinct gross-yields. Using the FMR, the annual rent would be $21,720 ($1810 x 12 months), leading to an implied gross-yield of approximately 4.46%. In contrast, applying the market rent of $2,340 per month results in an annual rent of $28,080, which translates into an implied gross-yield of about 5.76%.
The disparity between these yields highlights the importance of considering the local rental market dynamics. Given the renter density of 6.0%, it's clear that the demand for rental properties in Frankfort is relatively low compared to other areas. However, the 11-day Days on Market (DOM) suggests that when rental units become available, they are quickly occupied, indicating a competitive market for renters.
While the FMR scenario might be more conservative, the market rent figure of $2,340 per month is more reflective of the actual rental income landlords can expect from a two-bedroom property in ZIP 60423. This higher gross-yield of 5.76% is therefore more realistic, especially considering the quick turnover rate indicated by the 11-day DOM. Landlords and small-portfolio investors should aim to align their rental rates closer to the market rate to maximize their returns and ensure consistent occupancy.
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.