Section 8 Fair Market Rent (FMR) for ZIP 61554 - 2027

Investment Score for ZIP 61554

Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)

FY 2027 Fair Market Rent Rates

Unit Size	Monthly FMR
Studio	$840
1 Bedroom	$880
2 Bedrooms	$1,110
3 Bedrooms	$1,430
4 Bedrooms	$1,570
5 Bedrooms	$1,821
6 Bedrooms	$2,040
7 Bedrooms	$2,203
8 Bedrooms	$2,313

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
1BR	$880	$64,397	1.37%	A
2BR	$1,110	$108,529	1.02%	B
3BR	$1,430	$153,482	0.93%	C
4BR	$1,570	$203,206	0.77%	D
5BR	$1,821	$220,220	0.83%	C

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 61554 (Pekin, IL) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 61554 is set by HUD for 2026. For a two-bedroom unit, the FMR is $960 per month. However, the Zillow median price for a two-bedroom home in this area is $103,372, which translates to a monthly rent of approximately $9.0x the FMR. This suggests that actual rents in the market are significantly higher than the FMR, making it challenging for Section 8 voucher holders to find suitable housing. The voucher amount of $960 would only cover about 10.7% of the median home value when converted into monthly rent, indicating a substantial gap between what voucher holders can afford and the market rates. #### Affordability & Renter Profile In ZIP 61554, 27.1% of the population are renters, and the occupancy rate stands at 92.9%. Given the median household income of $65,194, the FMR for a two-bedroom unit represents 17.7% of the median income. This implies that while the FMR is affordable for some households, the actual market rents are likely beyond the reach of many low-income families. The tight market conditions suggest that there is a high demand for rental properties, but the supply may not be meeting the needs of all renters, especially those relying on Section 8 vouchers. #### Investor Angle For investors focusing on Section 8 properties, the ZIP code 61554 presents both opportunities and challenges. The FMR for a two-bedroom unit is $960, which is significantly lower than the actual market rents. If an investor can acquire a property at or near the FMR, they could potentially achieve positive cash flow. However, given the high price-to-FMR ratio of 9.0x, it is unlikely that properties will be available at such low prices. To determine if this ZIP is cash-flow positive at FMR, we need to consider the typical expenses associated with owning and managing a rental property. These include mortgage payments, property taxes, insurance, maintenance, and management fees. Assuming a conservative estimate of 50% of the FMR for these expenses, an investor would need to collect around $480 in net income per month from a two-bedroom unit. Given the FMR of $960, this would mean total expenses of approximately $480, leaving $480 in net income. However, since the actual market rents are much higher, an investor might struggle to find tenants willing to pay only the FMR. #### Specific Actionable Insights 1. **Target Lower-Rent Properties**: Investors should focus on acquiring properties that are priced closer to the FMR rather than the median market price. This will increase the likelihood of finding tenants who can utilize their Section 8 vouchers effectively. For example, a two-bedroom unit priced at $960 per month would be ideal for attracting voucher holders. 2. **Consider Smaller Units**: Given the high price-to-FMR ratio, smaller units like one-bedroom apartments might be more feasible for Section 8 tenants. The FMR for a one-bedroom unit is $760, which is still a fraction of the median home value. Investing in smaller units could provide better cash flow and a higher chance of occupancy. 3. **Engage with Local Housing Authorities**: Building relationships with local housing authorities can help investors understand the specific needs and constraints of voucher holders. This can lead to more targeted marketing efforts and potentially higher occupancy rates for Section 8-focused properties. #### Bottom Line Given the high price-to-FMR ratio and the limited affordability for Section 8 voucher holders, the recommendation for investors focused on Section 8 properties in ZIP 61554 is to **Skip**. The market conditions make it difficult to find properties that are both affordable and suitable for voucher holders, leading to potential challenges in achieving positive cash flow. Instead, investors might want to explore other ZIP codes with a more favorable balance between FMR and market rents.

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.