Section 8 Fair Market Rent (FMR) for ZIP 61231 - 2027

FY 2027 Fair Market Rent Rates

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

Housing Authorities Serving ZIP 61231

• Mercer County Housing Authority (Aledo, IL) - 38 Section 8 vouchers

A decision tree for evaluating whether to invest in ZIP code 61231 for Section 8 properties involves several key considerations based on the data provided.

Step 1: Can the Fair Market Rent (FMR) of $890 cover the debt service on a property valued at $163,978?

• Yes: The FMR is sufficient to cover the debt service if the property's monthly mortgage payment is less than $890. Given that the average property value is $163,978, a typical mortgage rate might result in a monthly payment around $750-$850, depending on the loan terms and down payment. Thus, the FMR does clear the debt service, making the investment viable from a financial standpoint.
• No: If the monthly debt service exceeds $890, then the FMR cannot support the purchase price. This would make the investment unfeasible under current conditions.

Step 2: How does the market rent of $815 compare to the FMR?

• Above FMR: If the market rent were higher than the FMR, it would indicate a strong rental market where landlords could potentially earn more from private tenants than from Section 8 vouchers. However, in this case, the market rent is below the FMR at $815, suggesting that landlords might prefer Section 8 tenants to fill vacancies.
• At or Below FMR: With the market rent at $815, which is below the FMR, landlords are incentivized to accept Section 8 vouchers due to the higher guaranteed income compared to market rates.

Step 3: Is there sufficient demand with 27.8% of residents being renters and an unknown number of days on the market (DOM)?

• It Depends: The percentage of renters at 27.8% indicates a moderate level of demand for rental housing. However, without knowing the exact DOM, it is difficult to gauge how quickly properties are rented out. If DOM is low, it suggests high demand and quick turnover, which is favorable. Conversely, if DOM is high, it implies a slower rental market and potential vacancy risks.

In summary, ZIP 61231 presents a scenario where the FMR can likely cover debt service on a $163,978 property, and market rents are below the FMR, encouraging acceptance of Section 8 vouchers. However, the sufficiency of demand remains uncertain without additional data on DOM. Landlords should proceed with caution, ensuring they understand local market dynamics and tenant preferences before investing.

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.