Location: Vermilion County, IL | Metro: Vermilion County, IL
| Unit Size | Monthly FMR |
|---|---|
| Studio | $820 |
| 1 Bedroom | $820 |
| 2 Bedrooms | $1,050 |
| 3 Bedrooms | $1,400 |
| 4 Bedrooms | $1,470 |
| 5 Bedrooms | $1,705 |
| 6 Bedrooms | $1,910 |
| 7 Bedrooms | $2,063 |
| 8 Bedrooms | $2,166 |
U.S. Census Bureau data (2024)
A decision tree for evaluating whether to invest in ZIP code 60963 for Section 8 properties hinges on three key questions:
1) Does the Fair Market Rent (FMR) of $1010 cover the debt service on a property valued at $109,613?
Yes: The FMR of $1010 must be compared against the expected monthly mortgage payment for a property of that value. Assuming a typical financing scenario with a 30-year fixed-rate mortgage at an interest rate of 4%, the monthly mortgage payment would be approximately $535. This amount does not include property taxes, insurance, and maintenance costs, which can add up to another $200-$300 per month. Therefore, if these additional costs total less than $475, the FMR of $1010 will cover the debt service.
No: If the total debt service exceeds $1010, then the FMR does not sufficiently cover the costs, making the investment unviable under Section 8 guidelines without additional subsidies or higher rents from non-Section 8 tenants.
2) Is the market rent of $787 above, at, or below the FMR?
Below FMR: With the market rent at $787, it falls below the FMR of $1010. This indicates that the local rental market is underserved and potentially undervalued, offering an opportunity for landlords to charge closer to the FMR without alienating tenants.
At or Above FMR: If the market rent were to rise to meet or exceed the FMR, it would suggest a competitive rental market where landlords might struggle to attract Section 8 tenants due to the cap on allowable rent.
3) Are 28.2% renters combined with an unspecified number of days on the market (DOM) sufficient to create demand?
Yes: A 28.2% rental rate implies a significant portion of the population is renting. Given the gap between the market rent ($787) and the FMR ($1010), there is potential for landlords to capture a portion of this demand at rates that align with Section 8 guidelines. Additionally, the lack of data on DOM suggests that listings may move quickly once they are priced correctly, indicating strong tenant interest.
No: If the rental rate were significantly lower, or if the DOM indicated long periods before units are leased, this would suggest insufficient demand. However, with 28.2% of the population renting and the market rent below the FMR, the demand appears adequate.
It Depends: The strength of demand also depends on the specifics of the DOM data. If units take longer than average to lease, despite the favorable gap between market rent and FMR, it could indicate challenges in attracting tenants. Conversely, if units are leased quickly, this points to a healthy demand environment.
In conclusion, for ZIP 60963, the FMR of $1010 can cover debt service on a $109,613 property, provided additional costs do not exceed $475. The market rent being below the FMR presents an opportunity for landlords to increase their income while still adhering to Section 8 guidelines. The 28.2% rental rate supports sufficient demand, but the exact leasing dynamics depend on the DOM data, which is currently unavailable.
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.