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 | $880 |
| 1 Bedroom | $920 |
| 2 Bedrooms | $1,160 |
| 3 Bedrooms | $1,490 |
| 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 |
|---|---|---|---|---|
| 1BR | $920 | $82,960 | 1.11% | B |
| 2BR | $1,160 | $109,891 | 1.06% | B |
| 3BR | $1,490 | $138,119 | 1.08% | B |
| 4BR | $1,640 | $192,769 | 0.85% | C |
U.S. Census Bureau data (2024)
ZIP 61616, located in Peoria Heights, IL, within the Peoria, IL MSA, serves as an ideal cash-flow anchor for a Section 8 portfolio strategy. The primary reason for this designation lies in the significant spread between the Fair Market Rent (FMR) and the market rent for the area. For fiscal year 2024, the FMR for ZIP 61616 is set at $930, while the average market rent stands at $1,898. This substantial difference means that properties in this ZIP code can be leased to tenants receiving Section 8 vouchers at a rate that still provides a solid margin above the government-set minimum.
The median home value in ZIP 61616 is $114,922, which further supports its role as a cash-flow anchor. Properties at this price point are generally more affordable, allowing investors to purchase multiple units without a significant capital outlay. This affordability also reduces the risk associated with property maintenance and unexpected expenses, ensuring a steady and reliable cash flow.
While the 0.4% price-cut share and the lack of data on days on market (DOM) indicate that there is little to no need for aggressive pricing strategies or extended marketing periods, these factors alone do not make ZIP 61616 an appreciation play. Appreciation plays typically require a higher potential for property value growth, which is not evident here given the median home value and the stable rental market.
ZIP 61616 is not primarily a diversifier either, despite the 33.6% renter share and median income of $60,099. Diversifiers in a Section 8 portfolio often target areas with higher incomes or varied economic conditions to balance the overall investment risk. However, the median income figure suggests that the majority of residents have sufficient financial stability to support their housing needs, but it does not imply a high level of disposable income that would drive up property values or rents.
In summary, ZIP 61616 is best suited as a cash-flow anchor due to its favorable FMR to market rent spread and the relatively low median home value. These characteristics ensure a consistent and predictable income stream, making it a valuable addition to any Section 8-focused real estate portfolio.
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.