Section 8 Fair Market Rent (FMR) for ZIP 61820 - 2027

Investment Score for ZIP 61820

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	$1,130
1 Bedroom	$1,150
2 Bedrooms	$1,350
3 Bedrooms	$1,700
4 Bedrooms	$1,770
5 Bedrooms	$2,053
6 Bedrooms	$2,299
7 Bedrooms	$2,483
8 Bedrooms	$2,607

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	$1,350	$158,672	0.85%	C
3BR	$1,700	$203,318	0.84%	C
4BR	$1,770	$275,540	0.64%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 61820 (Champaign, IL) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) figures for ZIP code 61820 in Champaign, Illinois, indicate that the rental market is highly regulated by the housing assistance program. For a two-bedroom unit, the FMR is set at $1270, which represents 55.3% of the median household income of $27,539. This suggests that the majority of residents who qualify for Section 8 vouchers would find it challenging to afford higher rent rates outside the FMR range. However, the actual rents in the area are significantly higher than the FMR. The Zillow median price for a two-bedroom property is $149,657, which translates to a price-to-FMR ratio of 9.8x. This means that landlords who wish to participate in the Section 8 program must adhere to the FMR limits, which can be a constraint given the high actual rental costs. Landlords might struggle to cover their expenses if they rely solely on FMR rates. #### Affordability & Renter Profile The ZIP code 61820 has a population of 40,599, with 80.4% of the households being renters. This high percentage of renters indicates a strong demand for rental properties, particularly among low-income individuals. The occupancy rate of 83.8% suggests that the market is relatively tight, with most available units being occupied. Given the median household income of $27,539, many residents likely depend on financial assistance such as Section 8 vouchers to manage their housing costs. The FMR for a two-bedroom unit at $1270 is a critical benchmark for affordability, representing just over half of the median income. This implies that the majority of residents are in a precarious financial position, making them highly sensitive to any increases in rent beyond the FMR. #### Investor Angle From an investor perspective, the ZIP code 61820 presents both opportunities and challenges. The high demand for rental properties, coupled with the significant number of Section 8 voucher holders, creates a stable tenant base. However, the cash flow potential is limited due to the strict adherence to FMR rates. To determine whether this ZIP code is cash-flow positive at FMR, we need to consider the typical operating expenses for rental properties. These include mortgage payments, property taxes, insurance, maintenance, and utilities. Given the Zillow median price of $149,657 for a two-bedroom unit, let’s assume a conservative mortgage payment of $700 per month (based on a 30-year fixed-rate mortgage at 4.5% interest). Adding in other typical expenses such as property taxes ($150), insurance ($50), maintenance ($100), and utilities ($50), the total monthly expenses would be around $1050. At the FMR of $1270 for a two-bedroom unit, there would be a small positive cash flow of approximately $220 per month. However, this margin is slim and leaves little room for error or unexpected expenses. Therefore, while it is possible to generate a positive cash flow, the returns are modest compared to the actual rental market rates. In terms of investment grade, the ZIP code 61820 would be considered a moderate risk. The high demand for rental properties provides stability, but the limited upside potential due to FMR constraints makes it less attractive for investors seeking higher returns. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high FMR-to-income ratio, investors should focus on smaller units like one-bedroom apartments. The FMR for a one-bedroom unit is $1070, which is closer to the median income and thus more affordable for voucher holders. This could provide a better balance between demand and affordability. 2. **Consider Location-Specific Strategies**: While the overall market is tight, certain neighborhoods within ZIP code 61820 might offer better opportunities. Investors should look into areas with lower property values or where there is a higher concentration of Section 8 voucher holders. This could help in securing tenants more easily and potentially achieving a slightly higher cash flow. 3. **Enhance Property Value**: Investors can improve the value of their properties through renovations and upgrades, which can attract tenants willing to pay slightly above the FMR. However, this strategy requires careful budgeting and planning to ensure that the additional costs do not outweigh the benefits. #### Bottom Line For Section 8-focused investors, ZIP code 61820 presents a mixed picture. While the high demand for rental properties ensures a steady stream of tenants, the limited cash flow potential due to FMR constraints makes it a less lucrative option. Therefore, the recommendation is to **Hold** investments in this ZIP code if already established, but **Skip** new investments unless you can identify specific niches or strategies to enhance profitability. The market dynamics suggest that while there is a robust tenant base, the returns are modest and the risks are moderate. Investors should carefully weigh these factors before committing to new projects 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.