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 | $1,750 |
| 1 Bedroom | $1,860 |
| 2 Bedrooms | $2,100 |
| 3 Bedrooms | $2,700 |
| 4 Bedrooms | $3,080 |
| 5 Bedrooms | $3,573 |
| 6 Bedrooms | $4,002 |
| 7 Bedrooms | $4,322 |
| 8 Bedrooms | $4,538 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,100 | $297,667 | 0.71% | D |
| 3BR | $2,700 | $465,347 | 0.58% | F |
| 4BR | $3,080 | $636,891 | 0.48% | F |
| 5BR | $3,573 | $820,812 | 0.44% | F |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP 60464 (Palos Park, IL) reveals a nuanced picture when comparing Federal Market Rent (FMR) to market rent figures. Using the annualized 2BR FMR of $2490 for FY 2024, the implied gross yield is approximately 0.47%. This is calculated by taking the annualized rent ($2490) and dividing it by the median home value ($531,166), which gives us a yield of 0.47%. On the other hand, using the market rent figure of $2,161 from the Census ACS, the implied gross yield drops to about 0.41%.
To determine which scenario is more realistic, we must consider the local rental market dynamics. Palos Park has a renter density of 12.6%, indicating that a significant portion of the housing stock is owner-occupied rather than rented out. This low rental density suggests that finding tenants for properties can be challenging, which is reflected in the N/A-day Days on Market (DOM) statistic. The absence of a DOM figure implies either very quick leasing or difficulty in finding reliable data on how long it takes to lease a property, both of which are indicative of an uncertain rental market.
Given these factors, the market rent figure of $2,161 appears more realistic for assessing potential returns. While the FMR of $2490 provides a higher gross yield, it does not necessarily reflect the actual rental income a landlord might receive in this specific ZIP code. The lower gross yield based on market rent aligns better with the observed low renter density and uncertain leasing conditions.
In conclusion, while the FMR scenario offers a slightly more attractive gross yield, the market rent scenario is more reflective of the realities faced by landlords in Palos Park, IL. Investors should use the market rent figure of $2,161 to calculate their own Net Operating Income (NOI) and assess whether the property fits their investment criteria at an implied gross yield of 0.41%.
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.