Location: Springfield, IL | Metro: Springfield, 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 | $1,190 |
| 2 Bedrooms | $1,510 |
| 3 Bedrooms | $1,990 |
| 4 Bedrooms | $2,110 |
| 5 Bedrooms | $2,448 |
| 6 Bedrooms | $2,742 |
| 7 Bedrooms | $2,961 |
| 8 Bedrooms | $3,109 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,990 | $284,883 | 0.7% | D |
U.S. Census Bureau data (2024)
The Section 8 thesis in ZIP code 62629 is centered around the discrepancy between the Fair Market Rent (FMR) and the actual market rent. For fiscal year 2024, the FMR is set at $1320, while the Zillow Observed Rental Index (ZORI) indicates a market rent of $1624. This creates a significant gap of $304, which represents a 22.9% difference between the two figures.
Given that the FMR is lower than the market rent, landlords and small-portfolio investors must consider the implications of accepting housing vouchers. Voucher tenants pay a portion of their income towards rent, with the government covering the remainder up to the FMR. In ZIP 62629, where the median income is $107,250, voucher tenants will likely pay less than the market rate, leaving landlords to absorb the difference. The gap means landlords could see a reduction in rental income by approximately $304 per unit, compared to open-market rates.
This situation makes it imperative for investors to evaluate whether the financial shortfall can be managed through other means, such as tax benefits, reduced turnover costs, or the stability provided by government-backed payments. With only 18.4% of residents being renters, competition for rental units is relatively low, which might further incentivize landlords to seek higher-paying tenants over those relying on vouchers.
The median home value in ZIP 62629 stands at $297,636, indicating a moderate level of wealth in the area. However, this does not directly translate into higher rental yields due to the voucher system. Landlords should carefully assess their investment strategies to ensure profitability, considering the local economic conditions and the specific terms of the housing vouchers.
In summary, the disparity between the FMR and market rent in ZIP 62629 presents a challenge for landlords. Accepting voucher tenants comes with the risk of receiving less than the market rent, necessitating a thorough understanding of the local rental market and the broader economic context to make informed decisions.
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.