Location: Shelby County, IL | Metro: Shelby County, IL
| Unit Size | Monthly FMR |
|---|---|
| Studio | $750 |
| 1 Bedroom | $830 |
| 2 Bedrooms | $1,020 |
| 3 Bedrooms | $1,270 |
| 4 Bedrooms | $1,530 |
| 5 Bedrooms | $1,775 |
| 6 Bedrooms | $1,988 |
| 7 Bedrooms | $2,147 |
| 8 Bedrooms | $2,254 |
U.S. Census Bureau data (2024)
A skeptical investor considering ZIP 62444 might have several concerns regarding the feasibility of renting properties under the Section 8 program. Here, we address those specific objections with available data.
Objection 1: Will Fair Market Rent (FMR) of $990 (for the metro area in fiscal year 2026) cover the mortgage on a $243,892 home?
The FMR of $990 is set by HUD and represents the maximum amount that a landlord can charge for a rental unit under the Section 8 program. To determine if this will cover the mortgage, consider the average interest rate on mortgages. According to recent data, the average 30-year fixed mortgage rate is around 6%. Using this rate, the monthly mortgage payment on a $243,892 home would be approximately $1,432. This calculation assumes a 20% down payment, which reduces the principal to $195,113.60. Clearly, the FMR of $990 falls short of covering the mortgage payment, leaving a shortfall of roughly $442 per month. Landlords must factor in this gap when assessing profitability.
Objection 2: Is there enough renter demand at 0.0%?
The 0.0% figure likely represents the percentage of households participating in the Section 8 program within ZIP 62444. This low participation rate suggests limited demand for Section 8 housing. However, the lack of data does not necessarily indicate a lack of need; it could mean that the program has limited availability or that there's an underserved market. Investors should look into the broader context of the area's demographics and housing needs to gauge potential future demand. Additionally, exploring partnerships with local housing authorities might provide insights into how demand could be stimulated.
Objection 3: Will vouchers keep pace with the market rents?
The data indicates that voucher amounts do not adjust automatically to market conditions. With a reported N/A for market rents, it's difficult to assess whether voucher payments will remain competitive over time. It's important to note that while FMRs are adjusted annually based on cost-of-living changes, they don't always align perfectly with actual market rents. Landlords should monitor both HUD's FMR adjustments and local real estate trends to ensure they stay informed about any discrepancies that could affect their income. Without specific market rent data, this remains an open question, but vigilance can help mitigate risks.
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.