Location: Rockford, IL | Metro: Rockford, IL MSA
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 | $800 |
| 1 Bedroom | $880 |
| 2 Bedrooms | $1,150 |
| 3 Bedrooms | $1,510 |
| 4 Bedrooms | $1,550 |
| 5 Bedrooms | $1,798 |
| 6 Bedrooms | $2,014 |
| 7 Bedrooms | $2,175 |
| 8 Bedrooms | $2,284 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,150 | $177,694 | 0.65% | D |
| 3BR | $1,510 | $255,104 | 0.59% | F |
| 4BR | $1,550 | $340,160 | 0.46% | F |
| 5BR | $1,798 | $414,572 | 0.43% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP 61008 (Belvidere, IL) reveals a nuanced investment landscape. Using the Federal Market Rent (FMR) for a 2BR unit at $1070 per month, the annualized income is $12,840. In contrast, the Census ACS reported market rent for a similar unit stands at $998 per month, equating to an annualized income of $11,976.
To derive the gross yield, we divide these annual incomes by the median home value of $258,034. The gross yield based on the FMR is approximately 4.98%, while the gross yield using the market rent figure is about 4.64%. This comparison highlights the potential premium that Section 8 contracts can offer over market rates.
Given the 23.4% renter density in Belvidere, it is important to consider the demand for rental properties. With a Days on Market (DOM) average of 8 days, there is strong evidence of a competitive rental market where landlords can expect quick property turnover. However, the lower market rent suggests that competition may also drive down rental prices.
The higher gross yield implied by the FMR scenario appears more optimistic. Yet, the actual performance of a Section 8 property will depend on several factors, including the stability of tenant payments and the administrative burden of managing such units. The market rent scenario, while offering a slightly lower gross yield, aligns closer with the current rental environment as reflected by the DOM and renter density metrics.
In conclusion, while the FMR-based gross yield of 4.98% offers a compelling initial return, the market rent-based gross yield of 4.64% provides a more grounded perspective on potential earnings. Investors should weigh these figures against their tolerance for administrative complexity and the local rental market dynamics.
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.