Location: Champaign-Urbana, IL | Metro: Champaign-Urbana, IL HUD Metro FMR Area
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 | $950 |
| 1 Bedroom | $970 |
| 2 Bedrooms | $1,140 |
| 3 Bedrooms | $1,430 |
| 4 Bedrooms | $1,500 |
| 5 Bedrooms | $1,740 |
| 6 Bedrooms | $1,949 |
| 7 Bedrooms | $2,105 |
| 8 Bedrooms | $2,210 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,140 | $141,056 | 0.81% | C |
| 3BR | $1,430 | $214,448 | 0.67% | D |
| 4BR | $1,500 | $283,307 | 0.53% | F |
| 5BR | $1,740 | $334,705 | 0.52% | F |
U.S. Census Bureau data (2024)
A landlord considering ZIP 61801 (Urbana, IL) for a Section 8 investment must evaluate several factors. The first step is to determine if the Fair Market Rent (FMR) of $1030 for the fiscal year 2024 can cover the debt service on a property valued at $186,119. This will depend on the specific mortgage terms, but generally, an FMR of $1030 would need to be sufficient to pay monthly mortgage payments, taxes, insurance, and maintenance costs.
If the answer to the first question is yes, proceed to the second: how does the Zillow Observed Rental Index (ZORI) of $1,386 compare to the FMR? In this case, the market rent is above the FMR, indicating that landlords might find it profitable to invest in properties with the intention of renting them out at market rates while also being eligible for Section 8 subsidies. However, if the landlord's goal is to exclusively rely on Section 8 tenants, they must ensure that the FMR covers all expenses.
The third factor is demand. With 66.7% of residents being renters and an average Days on Market (DOM) of 25 days, there is strong demand for rental properties in this area. This suggests that properties will likely be occupied quickly, which is beneficial for cash flow and reducing vacancy periods. However, the high percentage of renters and low DOM do not guarantee profitability; the landlord must still consider the rent-to-expense ratio.
Decision Tree:
Does FMR $1030 cover debt service?
Yes: Consider the ZORI of $1,386. Since market rent exceeds FMR, you can charge higher rents and still accept Section 8 tenants, increasing your potential income.
No: Investing solely for Section 8 tenants may not be financially viable due to insufficient rent to cover expenses. Look for other sources of income or reconsider the investment.
Is market rent above, at, or below FMR?
Above: Charge market rates and accept Section 8 tenants, maximizing your income while providing affordable housing.
At or Below: Relying on market rates alone may not be profitable if they are close to or lower than the FMR. Focus on the Section 8 program to ensure steady, government-backed rental income.
Are 66.7% renters + 25-day DOM enough demand?
Yes: Strong demand means quick occupancy and stable cash flow. Combine this with favorable market conditions to make a sound investment.
No: It depends on your tolerance for risk and the specifics of the property. High demand does not guarantee profitability if the FMR does not cover expenses.
In conclusion, ZIP 61801 presents a mix of opportunities and challenges for Section 8 investments. Landlords should carefully assess their financial situation and investment goals before deciding to purchase in this area.
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.