Location: Stephenson County, 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 | $890 |
| 1 Bedroom | $980 |
| 2 Bedrooms | $1,280 |
| 3 Bedrooms | $1,680 |
| 4 Bedrooms | $1,750 |
| 5 Bedrooms | $2,030 |
| 6 Bedrooms | $2,274 |
| 7 Bedrooms | $2,456 |
| 8 Bedrooms | $2,579 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,680 | $229,783 | 0.73% | D |
| 4BR | $1,750 | $284,878 | 0.61% | D |
U.S. Census Bureau data (2024)
A skeptical investor might raise several concerns regarding ZIP 61063, which includes parts of Stephenson and Winnebago Counties in Illinois. Let's address these concerns with the available data.
Objection 1: Will FMR $1100 (zip FY 2024) cover the mortgage on a $226,845 home?
The median home value in ZIP 61063 is around $136,000, which is significantly lower than the $226,845 home price mentioned. According to recent mortgage rate trends, a typical 30-year fixed-rate mortgage could be around 6.5%, which would result in a monthly mortgage payment of approximately $1,400 for a $226,845 home. Therefore, the Fair Market Rent (FMR) of $1100 would not fully cover the mortgage payment. However, it's important to note that the actual mortgage rate and payment could vary based on individual credit scores, down payments, and other factors.
Objection 2: Is there enough renter demand at 21.9%?
The rental vacancy rate in ZIP 61063 is estimated at 11.7%, which is higher than the Illinois state average of 6.2%. This suggests that there is some excess supply of rental units, but the percentage of housing units occupied by renters (17.0%) indicates a steady demand. Although the rental vacancy rate is high, it's worth noting that the demand for rental properties is still present. Investors should consider the potential for converting owner-occupied homes into rentals if they wish to capitalize on the existing demand.
Objection 3: Will vouchers keep pace with $1,116 market rents?
The average rent in ZIP 61063 is $1,100, slightly below the $1,116 market rent figure. While the data does not provide specific information on the trend of voucher usage, the fact that the average rent is close to the FMR suggests that vouchers are likely to be competitive. However, it's crucial to monitor local trends and consult with local housing authorities to ensure that voucher amounts remain consistent with market rents.
In conclusion, while the FMR may not fully cover the mortgage payment for a $226,845 home, the steady demand for rental properties and the competitiveness of vouchers suggest that ZIP 61063 remains a viable investment opportunity for landlords and small-portfolio investors. It's important to conduct thorough research and consider individual circumstances before making any investment decisions.
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.