Location: Iroquois County, IL | Metro: Iroquois County, IL
| Unit Size | Monthly FMR |
|---|---|
| Studio | $710 |
| 1 Bedroom | $710 |
| 2 Bedrooms | $930 |
| 3 Bedrooms | $1,150 |
| 4 Bedrooms | $1,550 |
| 5 Bedrooms | $1,798 |
| 6 Bedrooms | $2,014 |
| 7 Bedrooms | $2,175 |
| 8 Bedrooms | $2,284 |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 60956 provides insights into the financial viability of properties in this area when leased under the Section 8 program. The Fair Market Rent (FMR) for a 2-bedroom apartment in the metro area for fiscal year 2026 is set at $920 per month. When annualized, this translates to a yearly rental income of $11,040. In contrast, the market rent for a similar property, based on Census ACS data, stands at $775 per month, which annualizes to $9,300.
To determine the gross yield, we need to compare these figures against the median home value. However, the median home value for ZIP 60956 is not available, which complicates a direct cap rate calculation. Typically, the cap rate is derived by dividing the net operating income (NOI) by the property's value. Since we don't have the median home value, we can only provide an implied gross yield based on the annual rental incomes.
Given the 20.0% renter density in ZIP 60956, it suggests that a significant portion of the population is likely to seek rental housing, including those eligible for Section 8 assistance. The lack of data on days on market (DOM) makes it challenging to predict how quickly units might turn over, but generally, higher renter density supports a stable demand for rental properties.
Between the two scenarios, the one based on the market rent ($775 per month) is more realistic for most investors. While the FMR scenario offers a higher gross yield, it is contingent upon securing tenants willing to pay the higher subsidy rate. The market rent reflects actual rental rates paid by tenants without subsidies, providing a more reliable benchmark for investment decisions.
In conclusion, while the Section 8 program offers the potential for a higher gross yield at 5.52%, the reality of market conditions suggests that the more practical yield is closer to 4.65%. Investors should consider these figures alongside other factors such as property management costs, vacancy rates, and local market trends to make informed decisions.
Data Sources: FMR data from HUD (2027). 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.