Location: Peoria, IL | Metro: Peoria, 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 | $1,020 |
| 1 Bedroom | $1,070 |
| 2 Bedrooms | $1,350 |
| 3 Bedrooms | $1,730 |
| 4 Bedrooms | $1,900 |
| 5 Bedrooms | $2,204 |
| 6 Bedrooms | $2,468 |
| 7 Bedrooms | $2,665 |
| 8 Bedrooms | $2,798 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,350 | $119,237 | 1.13% | B |
U.S. Census Bureau data (2024)
The Section 8 thesis for ZIP code 61602 in Peoria, IL, is based on the significant gap between the Fair Market Rent (FMR) and the actual market rent. For fiscal year 2024, the FMR is set at $1080, while the Census ACS reports the market rent at $965. This means that the FMR is $115 higher than the market rent, representing an increase of approximately 12%. This discrepancy makes ZIP 61602 a prime area for yield-focused investments.
Voucher tenants, who are guaranteed rental income through the Section 8 program, can be highly attractive to landlords and small-portfolio investors. The FMR of $1080 exceeds the typical market rent of $965, ensuring that landlords receive a rate above what they might get from non-voucher tenants. In Peoria, where 86.1% of the population are renters and the median home value stands at $117,828, the opportunity to secure a steady stream of higher rental income is particularly appealing.
The median income in Peoria is $33,750, which underscores the importance of the Section 8 program in providing affordable housing options for low-income residents. By accepting voucher tenants, landlords can capitalize on the government's willingness to pay above market rates, thus enhancing their investment yields. However, it is crucial to note that landlords must comply with federal housing quality standards and undergo regular inspections, which can add operational costs.
In summary, the gap between the FMR and market rent in ZIP 61602 presents a clear opportunity for yield-focused investments. Landlords and small-portfolio investors should consider the benefits of accepting Section 8 voucher tenants, given the favorable rental rates and the high demand for affordable housing in Peoria, IL.
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.