Location: Champaign-Urbana, IL | Metro: Bloomington, IL MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,000 |
| 1 Bedroom | $1,010 |
| 2 Bedrooms | $1,190 |
| 3 Bedrooms | $1,550 |
| 4 Bedrooms | $1,560 |
| 5 Bedrooms | $1,810 |
| 6 Bedrooms | $2,027 |
| 7 Bedrooms | $2,189 |
| 8 Bedrooms | $2,298 |
U.S. Census Bureau data (2024)
When considering whether to invest in ZIP 61854 for Section 8 properties, follow this decision tree:
1) Does the Fair Market Rent (FMR) of $1080 cover the debt service on a property priced at $215,018?
If the answer is yes, then proceed to the next question. To determine if $1080 covers the debt service, you must calculate the expected monthly mortgage payment based on the property price, interest rate, and loan terms. Assuming a standard 30-year fixed-rate mortgage with an interest rate of 4%, the monthly mortgage payment would be approximately $1040. This means that the FMR does indeed cover the debt service, allowing a small buffer for maintenance and other expenses.
2) Is the market rent of $1,021 above, at, or below the FMR?
The market rent of $1,021 is slightly below the FMR of $1080. This suggests that while you can potentially charge the higher FMR rate for Section 8 tenants, you might face challenges attracting non-Section 8 tenants willing to pay the FMR. However, since the FMR still covers the debt service, this is not a critical issue. It depends on your investment goals: if you prioritize stability over maximizing rental income, Section 8 in this ZIP code is viable.
3) Are 16.6% of residents renters and is the days on market (DOM) sufficient to indicate demand?
In ZIP 61854, 16.6% of residents are renters. Unfortunately, the days on market (DOM) information is not available. Given the rental percentage, there is a modest level of demand. However, without DOM data, it's challenging to assess the speed at which properties are rented out. If the DOM is low, indicating quick turnover, then demand is strong enough to support a Section 8 investment. If DOM is high, it could suggest difficulty in renting out units.
Summary:
Data Sources: FMR data from HUD (2027). 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.