Location: Knox 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: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,350 | $112,162 | 1.2% | A |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 61434 provides a detailed look into the potential rental income scenarios for landlords and small-portfolio investors. With an annualized Fair Market Rent (FMR) for a 2-bedroom apartment at $860 for fiscal year 2024, and the current market rent at $781 according to the Census ACS data, the gross yield can be calculated for both situations.
First, using the FMR of $860, the annual rental income would be $10,320. Dividing this by the median home value of $107,185 yields an implied gross-yield of approximately 9.6%. This figure represents the potential income if the property were rented under the Section 8 program.
Second, applying the market rent of $781, the annual rental income would amount to $9,372. The gross-yield in this case is roughly 8.7%, indicating the typical return from renting the property without the Section 8 subsidy.
Given the 20.2% renter density in ZIP 61434, it's important to note that a significant portion of the population may already be inclined towards rental housing. However, the lack of specific Days on Market (DOM) data makes it challenging to predict how quickly a Section 8 tenant might move in compared to a regular market renter. Despite this, the higher gross-yield from the FMR scenario suggests a potentially more favorable investment for those willing to participate in the Section 8 program. It's crucial for investors to weigh the benefits of a slightly higher gross-yield against the administrative requirements and potential challenges associated with the Section 8 program.
In conclusion, while the Section 8 program offers a higher gross-yield at 9.6%, the market rent scenario still presents a solid return of 8.7%. Investors should consider these figures alongside other factors such as property management costs, vacancy rates, and the overall demand for affordable housing in the area.
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.