Location: Mason County, IL | Metro: Fulton County, IL
| Unit Size | Monthly FMR |
|---|---|
| Studio | $650 |
| 1 Bedroom | $710 |
| 2 Bedrooms | $930 |
| 3 Bedrooms | $1,290 |
| 4 Bedrooms | $1,550 |
| 5 Bedrooms | $1,798 |
| 6 Bedrooms | $2,014 |
| 7 Bedrooms | $2,175 |
| 8 Bedrooms | $2,284 |
U.S. Census Bureau data (2024)
When considering whether to purchase a property in ZIP code 62644 for Section 8 investment, follow these decision points:
1. Debt Service Coverage Ratio (DSCR): The Fair Market Rent (FMR) for ZIP 62644 in fiscal year 2024 is set at $810. To determine if this amount clears debt service on a property valued at $82,074, you must calculate the DSCR. If the DSCR is greater than 1, then the FMR covers the debt service. If not, it does not. This calculation requires knowing the exact monthly debt service costs including mortgage payments, insurance, taxes, and maintenance.
2. Market Rent vs. FMR: The average market rent in ZIP 62644 is $750 according to Census ACS data. Since the FMR is higher at $810, the market rent is below the FMR. This means that Section 8 tenants can potentially cover the rent at rates higher than what the market currently offers, providing a buffer against potential rental shortfalls.
3. Rental Demand: In ZIP 62644, 18.2% of the population are renters. However, the Days on Market (DOM) data is not available, which would normally help assess how quickly properties are rented out. Given the percentage of renters, there is a reasonable demand for rental properties. Without DOM data, we must rely on other indicators such as vacancy rates and economic trends to gauge the stability of rental demand.
If the FMR of $810 covers the debt service, proceed to the next question. If not, the answer is No; purchasing in this area would not be advisable based on the financials alone.
If the FMR is higher than the market rent of $750, this supports a positive outlook on covering your costs with Section 8 subsidies. However, if the market rent were equal to or above the FMR, you'd need to consider if there's enough demand to sustain higher rents without subsidies, leading to an It Depends scenario where other factors become critical.
With 18.2% of the population renting, there is sufficient demand to support a Section 8 investment. However, the lack of DOM data introduces uncertainty. If other indicators suggest stable demand, the answer leans towards Yes. Otherwise, it could be It Depends on the broader economic conditions and the specific neighborhood dynamics within ZIP 62644.
To summarize, if the FMR exceeds debt service and market rent is below the FMR, and if additional research confirms steady rental demand, then the investment in ZIP 62644 for Section 8 purposes is viable. Conversely, if any of these conditions are not met, reconsider the investment or conduct further analysis.
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.