Location: Bloomington, IL | Metro: Bloomington, 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 | $1,050 |
| 1 Bedroom | $1,110 |
| 2 Bedrooms | $1,440 |
| 3 Bedrooms | $1,890 |
| 4 Bedrooms | $1,890 |
| 5 Bedrooms | $2,192 |
| 6 Bedrooms | $2,455 |
| 7 Bedrooms | $2,651 |
| 8 Bedrooms | $2,784 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,440 | $200,543 | 0.72% | D |
| 3BR | $1,890 | $270,841 | 0.7% | D |
| 4BR | $1,890 | $366,987 | 0.52% | F |
| 5BR | $2,192 | $495,995 | 0.44% | F |
U.S. Census Bureau data (2024)
The Section 8 real estate thesis in ZIP code 61704, which encompasses Bloomington, IL, centers around the disparity between the Fair Market Rent (FMR) and the actual market rent. For fiscal year 2024, the FMR is set at $1190, while the market rent, as measured by ZORI, stands at $1569. This creates a significant gap of $379, or approximately 23%, between what landlords can charge through Section 8 vouchers and the open-market rental rates.
This gap means that landlords who accept Section 8 housing vouchers will be renting their properties below the market rate, which can impact their investment yields. Given that Bloomington has a relatively high percentage of renters at 33.2%, the demand for affordable housing is strong. However, the lower FMR compared to the market rent suggests that landlords must carefully consider the financial implications of accepting voucher tenants.
In Bloomington, where the median home value is $319,758 and the median household income is $95,027, the difference between the FMR and market rent can affect the overall profitability of a property. Landlords should factor in the reduced rental income when evaluating the potential returns on their investments. The cost of maintaining properties and managing tenants remains the same, but the revenue is capped at $1190 per unit, despite the higher market rates.
To illustrate, if a landlord owns a property that could rent for $1569 on the open market, accepting a Section 8 tenant would mean forfeiting $379 in potential monthly rent. Over the course of a year, this amounts to a loss of $4,548 per unit. Therefore, landlords need to weigh the benefits of stable, government-backed rental payments against the lower income relative to market rates.
While Section 8 tenants provide a steady stream of income, the financial analysis shows that landlords might experience a yield reduction due to the gap between the FMR and the actual market rents. This makes it essential for landlords and small-portfolio investors to understand the local economic conditions and the specific terms of the housing vouchers 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.