Section 8 Fair Market Rent (FMR) for ZIP 61761 - 2027

Investment Score for ZIP 61761

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	$910
1 Bedroom	$960
2 Bedrooms	$1,240
3 Bedrooms	$1,620
4 Bedrooms	$1,630
5 Bedrooms	$1,891
6 Bedrooms	$2,118
7 Bedrooms	$2,287
8 Bedrooms	$2,401

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
2BR	$1,240	$176,041	0.7%	D
3BR	$1,620	$249,932	0.65%	D
4BR	$1,630	$316,473	0.52%	F
5BR	$1,891	$397,315	0.48%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 61761 (Normal, IL) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) figures for ZIP code 61761 in Normal, IL, as of 2026, are as follows: - 0BR: $880 - 1BR: $940 - 2BR: $1230 (which is 22.6% of the median household income) - 3BR: $1620 - 4BR: $1630 These FMRs represent the maximum amount that a Section 8 voucher holder can pay for rent based on the size of their unit. However, it's important to understand how these figures compare to actual rents in the area. The Zillow median price for a 2BR property is $169,963, which translates to a monthly mortgage payment of approximately $791 if financed at a 4% interest rate over 30 years. This is significantly lower than the FMR of $1230 for a 2BR unit, indicating that landlords who participate in the Section 8 program could potentially charge close to the FMR and still see a profit margin. However, there are several constraints for voucher holders: - They must find housing that accepts vouchers and is willing to charge the FMR or less. - Landlords have the option to set rents higher than the FMR, but the tenant would need to cover the difference out-of-pocket. - The voucher amount is fixed, so tenants might struggle to find units that fit within their budget, especially if landlords are unwilling to accept the voucher amount. #### Affordability & Renter Profile ZIP code 61761 has a population of 54,075, with 45.0% of residents being renters. This indicates a significant rental market presence, which is typical for areas with a strong university influence, such as Normal, IL, where Illinois State University is located. The occupancy rate stands at 91.8%, suggesting a relatively tight market with limited vacancies. Given the median household income of $65,275, the affordability of housing is a critical issue. The FMR for a 2BR unit is $1230, which represents 22.6% of the median income. This is within a reasonable range for most households, but it leaves little room for additional expenses, especially for those relying on Section 8 vouchers. The high renter percentage and occupancy rate indicate that demand for rental properties is robust, and competition among renters is likely to be fierce. #### Investor Angle From an investor's perspective, the ZIP code 61761 offers potential opportunities, particularly for those focusing on Section 8 properties. The price-to-FMR ratio for a 2BR unit is 11.5x, meaning that the median home price is about 11.5 times the FMR for a similar-sized rental unit. This suggests that the rental market is relatively expensive compared to the purchase market, which could be advantageous for investors looking to generate cash flow. To determine if this ZIP code is cash-flow positive at FMR, we need to consider the following: - A 2BR unit can command a rent of up to $1230 under the Section 8 program. - The median home price for a 2BR unit is $169,963, which translates to a monthly mortgage payment of around $791. - After accounting for the mortgage payment, maintenance costs, insurance, and property taxes, the remaining amount would be the net cash flow. Assuming a conservative estimate of $200 per month for maintenance, insurance, and property taxes, the net cash flow would be: \[ \text{Net Cash Flow} = \$1230 - \$791 - \$200 = \$239 \] This positive cash flow of $239 per month indicates that investing in Section 8 properties in this ZIP code could be financially viable. The investment grade for this ZIP code appears to be moderate to good, given the strong demand for rentals and the potential for steady cash flow. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high renter percentage and the tight market, smaller units (0BR and 1BR) might be easier to rent out and could provide a quicker return on investment. For instance, a 1BR unit with an FMR of $940 could be rented out more easily than a 3BR or 4BR unit, which have higher FMRs and might be less affordable for many renters. 2. **Consider Location and Amenities**: Since the occupancy rate is high, investors should focus on properties that are well-located and offer desirable amenities. Properties near Illinois State University, with easy access to public transportation, grocery stores, and other essential services, are likely to attract more renters and command closer to the FMR. 3. **Engage with Local Real Estate Agents**: To better understand the local rental market dynamics and to identify properties that are likely to be accepted by voucher holders, engaging with local real estate agents who specialize in the Section 8 program could be beneficial. These agents can provide insights into which neighborhoods are more attractive to voucher holders and what types of units are in highest demand. #### Bottom Line Based on the provided data, the ZIP code 61761 in Normal, IL, presents a moderately favorable environment for Section 8-focused investors. The strong demand for rentals, coupled with the potential for positive cash flow, makes this ZIP code worth considering. However, the tight market and high renter percentage suggest that competition for rental properties will be intense. Therefore, the recommendation is to **Buy**, but with a strategic focus on smaller units and properties with desirable amenities to maximize the chances of securing tenants and achieving the FMR rent levels. In summary, the key points for investors are: - The FMR is within a reasonable range of the median household income. - There is a strong rental market with high occupancy rates. - Positive cash flow is possible when renting at FMR levels. - Strategic location and amenities can enhance the attractiveness of properties to voucher holders. This ZIP code offers a balanced opportunity for investors interested in the Section 8 program, with potential for steady returns and manageable risks.

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.