Location: De Witt County, IL | Metro: Decatur, IL MSA
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 | $1,050 |
| 1 Bedroom | $1,050 |
| 2 Bedrooms | $1,340 |
| 3 Bedrooms | $1,730 |
| 4 Bedrooms | $2,120 |
| 5 Bedrooms | $2,459 |
| 6 Bedrooms | $2,754 |
| 7 Bedrooms | $2,974 |
| 8 Bedrooms | $3,123 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,730 | $186,640 | 0.93% | C |
U.S. Census Bureau data (2024)
The analysis of the Section 8 cap-rate scenario for ZIP code 62501 reveals a significant difference between the Federal Market Rent (FMR) and the actual market rent. For a two-bedroom unit, the annualized FMR set at $1080 for FY 2024 translates into an implied gross yield of approximately 5.58% when compared to the median home value of $193,583. This calculation is derived by multiplying the monthly FMR by 12 months ($1080 * 12 = $12,960) and dividing that figure by the median home value ($12,960 / $193,583).
In contrast, using the market rent figure of $797, which is based on Census ACS data, the implied gross yield drops to about 4.12%. This is calculated similarly: multiplying the monthly market rent by 12 months ($797 * 12 = $9,564) and then dividing by the median home value ($9,564 / $193,583).
Given the 9.6% renter density in ZIP 62501, it's important to consider the likelihood of securing tenants at the FMR rate. The lower renter density suggests that finding qualified Section 8 tenants might be challenging, thus making the higher gross yield of 5.58% less likely to be achieved consistently.
The N/A-day DOM (Days On Market) indicates incomplete data, which could imply either a very quick turnover or a lack of recent sales data. Without specific DOM figures, it's difficult to assess the liquidity of the rental market. However, the general trend towards higher vacancy rates in areas with low renter density supports the notion that the market rent scenario is more realistic. Landlords and small-portfolio investors should prepare for yields closer to the 4.12% mark rather than the optimistic 5.58% implied by the FMR.
To summarize, while the Section 8 program offers a higher potential gross yield of 5.58%, the reality of finding and retaining qualified tenants in ZIP 62501 may push investors towards achieving the more modest gross yield of 4.12%, reflective of the current market conditions.
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.