Location: Shelby County, IL | Metro: Coles County, IL
Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)
| Unit Size | Monthly FMR |
|---|---|
| Studio | $710 |
| 1 Bedroom | $800 |
| 2 Bedrooms | $1,010 |
| 3 Bedrooms | $1,210 |
| 4 Bedrooms | $1,660 |
| 5 Bedrooms | $1,926 |
| 6 Bedrooms | $2,157 |
| 7 Bedrooms | $2,330 |
| 8 Bedrooms | $2,447 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,010 | $152,358 | 0.66% | D |
| 3BR | $1,210 | $196,120 | 0.62% | D |
U.S. Census Bureau data (2024)
A skeptical investor considering Neoga, IL (ZIP 62447), might have several valid concerns regarding the feasibility of participating in the Section 8 housing program. Let's address these concerns with the available data.
Objection 1: Will Fair Market Rent (FMR) of $970 (metro FY 2026) cover the mortgage on a $168,216 home?
The FMR of $970 can be compared against average mortgage payments to determine if it's sufficient. To calculate the monthly mortgage payment, we must consider factors such as interest rates and loan terms. Assuming a 30-year fixed-rate mortgage at an average rate of 4%, the monthly payment for a $168,216 home would be approximately $800. This means that the FMR does cover the mortgage payment, leaving a buffer of $170 per month which could be used for property taxes, insurance, and maintenance costs. However, it's important to note that this calculation assumes the lowest end of the mortgage rate spectrum; higher rates would reduce the buffer.
Objection 2: Is there enough renter demand at 12.3%?
The rental demand percentage of 12.3% indicates the proportion of households that are renters in the area. While this figure is relatively low, it suggests that there is still a significant number of potential tenants who might seek housing through Section 8. A lower percentage of renters could mean fewer applicants, but it also implies less competition among landlords. The key metric here is the total number of Section 8 participants in the area, which would provide a clearer picture of the demand. Unfortunately, the provided data does not include this specific number, so we cannot definitively quantify the level of demand.
Objection 3: Will vouchers keep pace with $941 market rents?
The FMR of $970 is slightly above the current market rent of $941, indicating that vouchers should theoretically cover the typical rent in the area. However, the effectiveness of this coverage depends on the actual distribution and utilization of vouchers. If the number of vouchers available is insufficient relative to the number of eligible households, some landlords might struggle to find tenants willing to pay the full market rent. Additionally, the pace at which voucher amounts adjust to changes in market rents is critical. If market rents rise faster than voucher amounts, landlords could face difficulties maintaining profitability. The data provided does not offer insights into the historical trend of voucher adjustments relative to market rent increases, so caution is advised when making long-term projections.
In summary, while the FMR of $970 is sufficient to cover a mortgage on a home priced at $168,216 under certain conditions, the relatively low rental demand percentage of 12.3% and the uncertainty around future voucher adjustments pose risks. Landlords and small-portfolio investors should carefully evaluate these factors alongside other local economic indicators before committing to the Section 8 program in Neoga, IL.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). 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.