Location: Champaign-Urbana, IL | Metro: Champaign-Urbana, IL HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $980 |
| 1 Bedroom | $990 |
| 2 Bedrooms | $1,170 |
| 3 Bedrooms | $1,470 |
| 4 Bedrooms | $1,540 |
| 5 Bedrooms | $1,786 |
| 6 Bedrooms | $2,000 |
| 7 Bedrooms | $2,160 |
| 8 Bedrooms | $2,268 |
The analysis of the Section 8 cap-rate scenario for ZIP code 61826 in Illinois reveals several key points that landlords and small-portfolio investors should consider. The Federal Market Rent (FMR) for a two-bedroom property in fiscal year 2024 is set at $1050 per month. To annualize this figure, we multiply it by 12, resulting in an annual rental income of $12,600.
The median home value in ZIP 61826 is currently not available, which makes direct comparisons to market rents challenging. However, for the sake of analysis, let's assume a hypothetical market rent scenario based on typical local conditions. Without specific market rent data, we cannot provide a precise gross yield comparison, but we can infer that if market rents were higher than the FMR, the gross yield would be lower when considering the Section 8 program.
To calculate the implied gross yield for the Section 8 scenario, we need the median home value. Since this information is not available, we cannot provide a specific gross yield percentage. However, in general, the gross yield is calculated by dividing the annual rental income by the median home value. For example, if the median home value were $250,000, the gross yield would be approximately 5% ($12,600 / $250,000).
The lack of specific market rent data means that any comparison to the Section 8 FMR must be speculative. Nevertheless, the gross yield derived from the FMR is a useful benchmark for assessing the potential profitability of properties in this area under the Section 8 program. Given the unknown renter density and days on market (DOM), it is difficult to determine which scenario is more realistic. A higher renter density might suggest that market rents could be closer to the FMR, making the Section 8 gross yield more competitive.
In conclusion, while the exact cap-rate cannot be determined due to missing data, the Section 8 program provides a stable rental income of $12,600 annually for a two-bedroom property. This income level should be considered alongside local market conditions and the median home value to make informed investment decisions.
Data Sources: FMR data from HUD (2027).
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.