Location: Crawford County, IL | Metro: Clark County, IL
| Unit Size | Monthly FMR |
|---|---|
| Studio | $710 |
| 1 Bedroom | $780 |
| 2 Bedrooms | $1,010 |
| 3 Bedrooms | $1,230 |
| 4 Bedrooms | $1,490 |
| 5 Bedrooms | $1,728 |
| 6 Bedrooms | $1,935 |
| 7 Bedrooms | $2,090 |
| 8 Bedrooms | $2,195 |
U.S. Census Bureau data (2024)
A skeptical investor looking at ZIP code 62442 might have several concerns regarding the viability of investing in properties that participate in the Section 8 program. Here, we address these concerns with the data available.
Objection 1: Will the Fair Market Rent (FMR) of $1,030 (for the metro area in fiscal year 2026) cover the mortgage on a $112,378 home?
The FMR of $1,030 is an important figure but does not fully encapsulate whether it will cover the mortgage on a $112,378 home. To determine if the FMR is sufficient, one must consider the prevailing interest rates and the terms of the mortgage. However, the median home value suggests that homes in this ZIP code are generally affordable, which can be advantageous for landlords participating in the Section 8 program. It's crucial to note that the FMR is set to ensure that landlords receive a reasonable return while keeping housing costs affordable for low-income tenants.
Objection 2: Is there enough renter demand at 16.9%?
The 16.9% rental rate indicates that nearly one in six households in ZIP 62442 are renters. This percentage reflects the rental demand relative to the total number of households. While this figure is somewhat low, it does not necessarily mean there is insufficient demand. The rental market in this area could still be viable, especially if the vacancy rate is low and competition among renters is high. Additionally, the demand for affordable housing can remain steady even in areas with lower overall rental rates. Investors should look into local rental trends and vacancy rates to better gauge the actual demand.
Objection 3: Will vouchers keep pace with $635 market rents?
The average voucher amount in the area is not specified in the provided data, making it difficult to definitively state whether vouchers will keep up with the market rents of $635. However, historically, HUD adjusts voucher amounts annually based on changes in the FMR and cost-of-living adjustments. If the voucher amount is close to or exceeds the $635 market rent, landlords would find participation in the Section 8 program financially beneficial. Conversely, if the voucher amount is significantly below the market rent, landlords might face financial strain. Regular monitoring of HUD's adjustments and local market conditions is essential to predict future trends accurately.
In conclusion, while the data provides insights into some aspects of the investment landscape in ZIP 62442, it is limited in addressing all concerns comprehensively. Investors should conduct further research into specific mortgage scenarios, local rental trends, and voucher adjustments to make informed decisions.
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.