Location: Vermilion County, IL | Metro: Edgar County, IL
| Unit Size | Monthly FMR |
|---|---|
| Studio | $720 |
| 1 Bedroom | $730 |
| 2 Bedrooms | $930 |
| 3 Bedrooms | $1,240 |
| 4 Bedrooms | $1,300 |
| 5 Bedrooms | $1,508 |
| 6 Bedrooms | $1,689 |
| 7 Bedrooms | $1,824 |
| 8 Bedrooms | $1,915 |
U.S. Census Bureau data (2024)
A skeptical investor analyzing ZIP code 61876 might raise several concerns regarding the feasibility of participating in the Section 8 program. Here are three common objections, addressed with the available data.
Objection 1: Will Fair Market Rent (FMR) of $930 for ZIP 61876 in fiscal year 2024 cover the mortgage on a $102,956 home?
The FMR of $930 is designed to reflect the average rent level in the area and is used to determine the maximum rental amount that can be paid by the housing choice voucher program. However, it's crucial to understand that the FMR does not directly correlate with the mortgage payment on a property valued at $102,956. To cover a mortgage, an investor must consider the interest rate, loan term, and down payment. Assuming a typical 30-year fixed-rate mortgage with an interest rate of 4.5% and a 20% down payment, the monthly principal and interest payment would be approximately $350. The FMR of $930, therefore, leaves room for additional income from other sources such as property taxes, insurance, and maintenance costs, which are also covered under the Section 8 program.
Objection 2: Is there enough renter demand at 5.8%?
The 5.8% occupancy rate suggests that there is significant competition among landlords in ZIP 61876. This low figure could indicate that the local market is oversaturated with rental properties or that there is a lack of demand for rentals overall. However, the Section 8 program typically has a higher demand due to the guaranteed income stream and the assistance it provides to low-income families. While the general rental market may show signs of saturation, the demand for Section 8 units is often more stable and less affected by broader market trends. Investors should focus on the specific demand for subsidized housing rather than the overall rental market to gauge potential success.
Objection 3: Will vouchers keep pace with $675 market rents?
The market rent of $675 is below the FMR of $930, indicating that the voucher amounts should theoretically cover the rent for most properties in the area. However, whether the voucher will keep pace with future increases in market rents is uncertain without further data on projected changes in both market rents and voucher amounts. Historically, the Department of Housing and Urban Development (HUD) adjusts voucher amounts periodically based on economic conditions and cost-of-living adjustments, but these adjustments do not always align perfectly with local market dynamics. Investors should monitor local housing trends and HUD updates closely to ensure continued financial viability.
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.