Location: Livingston County, 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 | $690 |
| 1 Bedroom | $740 |
| 2 Bedrooms | $940 |
| 3 Bedrooms | $1,220 |
| 4 Bedrooms | $1,310 |
| 5 Bedrooms | $1,520 |
| 6 Bedrooms | $1,702 |
| 7 Bedrooms | $1,838 |
| 8 Bedrooms | $1,930 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $940 | $99,401 | 0.95% | C |
| 3BR | $1,220 | $173,625 | 0.7% | D |
| 4BR | $1,310 | $224,867 | 0.58% | F |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 61740 (Flanagan, IL) reveals some interesting dynamics when comparing the annualized Fair Market Rent (FMR) and market rent against the median home value.
The Fair Market Rent for a 2-bedroom apartment in Flanagan, IL, for fiscal year 2024 is set at $960 per month. This translates to an annual rent of $11,520. Given the median home value in the area is $162,529, the implied gross yield based on the FMR would be approximately 7.1%. This calculation is derived by dividing the annual rent by the median home value: $11,520 / $162,529 = 0.071 or 7.1%.
In contrast, the market rent for a 2-bedroom apartment in the same area, according to Census ACS data, is $871 per month. Annualizing this figure gives us an annual rent of $10,452. The implied gross yield based on the market rent would therefore be approximately 6.4%, calculated as $10,452 / $162,529 = 0.064 or 6.4%.
The gross yield comparison clearly shows that the FMR scenario yields a higher return compared to the market rent scenario. However, the reality of rental dynamics in Flanagan, IL, must also be considered. With a renter density of only 13.9%, it suggests that a significant portion of the housing stock is owner-occupied, which could limit the pool of potential Section 8 tenants.
Additionally, the N/A-day Days on Market (DOM) indicates incomplete data, which might reflect a lack of recent rental activity or a limited number of properties listed for rent. This could mean that the market rent figure is not fully representative of the current rental landscape in Flanagan, IL.
Given these factors, while the FMR-based gross yield of 7.1% appears more attractive, the actual performance may vary due to the lower renter density and potentially less liquid rental market. Landlords and small-portfolio investors should consider these nuances when evaluating the potential returns of Section 8 properties in ZIP 61740.
To summarize, the FMR scenario offers a gross yield of 7.1%, whereas the market rent scenario provides a gross yield of 6.4%. The higher yield under the FMR scenario is theoretically more favorable, but the practical implications of the low renter density and uncertain DOM data suggest caution in expecting such high returns consistently.
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.