Location: Whiteside County, IL | Metro: Davenport-Moline-Rock Island, IA-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 | $740 |
| 1 Bedroom | $840 |
| 2 Bedrooms | $1,030 |
| 3 Bedrooms | $1,350 |
| 4 Bedrooms | $1,640 |
| 5 Bedrooms | $1,902 |
| 6 Bedrooms | $2,130 |
| 7 Bedrooms | $2,300 |
| 8 Bedrooms | $2,415 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,030 | $149,522 | 0.69% | D |
| 3BR | $1,350 | $198,330 | 0.68% | D |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 61250 in Erie, IL, reveals a complex picture when comparing the Federal Market Rent (FMR) and the market rent against the median home value. For a two-bedroom unit, the annualized FMR for fiscal year 2024 is $890 per month, while the market rent, according to Census ACS data, is $838 per month. The median home value in the area stands at $168,399.
To derive the gross yield for both scenarios, we first calculate the annual rent revenue. With the FMR at $890 per month, the annual rent would be $10,680. Dividing this by the median home value gives an implied gross yield of approximately 6.35%. Conversely, using the market rent figure of $838 per month, the annual rent would be $10,056, leading to an implied gross yield of about 6.00%.
Given the 19.2% renter density in the area, it's clear that the market conditions favor a higher proportion of homeowners. This suggests that the market rent scenario is more realistic for most properties in ZIP 61250. However, the FMR represents a guaranteed income level for landlords participating in the Section 8 program, which can be attractive despite the lower renter density.
The N/A-day DOM (Days on Market) indicates that there isn't enough recent data to accurately gauge how quickly rental properties are being leased in this area. Nevertheless, the disparity between the FMR and market rent yields shows that landlords could potentially earn a slightly higher gross yield through the Section 8 program compared to the general market. This difference, however, is minimal and should be weighed against the administrative requirements and potential complexities associated with the program.
In conclusion, while the FMR scenario offers a gross yield of 6.35%, the market rent scenario, at 6.00%, is likely more reflective of the actual rental environment in ZIP 61250. Investors should consider these figures alongside other factors such as property management costs and local demand for subsidized housing before making investment decisions.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.