Location: Stephenson County, IL | Metro: Jo Daviess County, IL
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 | $650 |
| 1 Bedroom | $720 |
| 2 Bedrooms | $930 |
| 3 Bedrooms | $1,180 |
| 4 Bedrooms | $1,460 |
| 5 Bedrooms | $1,694 |
| 6 Bedrooms | $1,897 |
| 7 Bedrooms | $2,049 |
| 8 Bedrooms | $2,151 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,180 | $214,375 | 0.55% | F |
| 4BR | $1,460 | $244,372 | 0.6% | F |
U.S. Census Bureau data (2024)
The analysis of the Section 8 program in ZIP code 61048 reveals a significant gap between the Fair Market Rent (FMR) and the actual market rent. The FMR for the metro area for fiscal year 2026 is set at $920, while the Census ACS data indicates that the market rent stands at $664. This means that there is a $256 difference, or approximately a 38.1% gap, between what landlords can charge under the Section 8 program and the prevailing market rent.
The disparity where FMR exceeds market rent makes the ZIP code an attractive yield play for landlords and small-portfolio investors. By participating in the Section 8 program, landlords can secure rental income that is higher than the current market rate, thus increasing their potential returns. Given that only 17.2% of residents are renters, there is less competition for rental properties, making it easier to fill units with voucher holders who provide a guaranteed income stream.
The median home value in ZIP 61048 is $203,913, which suggests a relatively stable housing market. However, the median income of $82,875 indicates that many residents might struggle to afford homes at the median value, driving them towards rental options. The Section 8 program allows landlords to tap into a segment of the population that might otherwise be unable to afford the rents commanded by the open market, ensuring steady occupancy and cash flow.
Investors should note that while the higher FMR provides a financial advantage, it also comes with the responsibility of maintaining properties to meet HUD standards and managing the administrative aspects of the voucher program. Despite these considerations, the gap between FMR and market rent in 61048 represents a compelling opportunity to enhance investment yields through the Section 8 program.
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.