Location: Franklin County, IL | Metro: Franklin County, IL
| Unit Size | Monthly FMR |
|---|---|
| Studio | $650 |
| 1 Bedroom | $710 |
| 2 Bedrooms | $930 |
| 3 Bedrooms | $1,230 |
| 4 Bedrooms | $1,320 |
| 5 Bedrooms | $1,531 |
| 6 Bedrooms | $1,715 |
| 7 Bedrooms | $1,852 |
| 8 Bedrooms | $1,945 |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 62874 reveals an interesting dynamic between government-subsidized rental income and market-driven rental rates. The Fair Market Rent (FMR) for a two-bedroom apartment in the area, as determined by HUD for fiscal year 2026, is set at $920 per month. This translates to an annualized figure of $11,040. On the other hand, the Census Bureau's American Community Survey (ACS) reports the average market rent for a similar unit at $779 per month, or $9,348 annually.
To derive the implied gross yield, we need to compare these figures against the median home value. However, the median home value for ZIP 62874 is not available, which complicates a direct calculation of the gross yield. Despite this limitation, we can still make a comparative assessment based on the renter density and days on market (DOM).
The ZIP code has a renter density of 25.5%, indicating that a significant portion of the housing stock is owned rather than rented. This fact suggests that the market rent might be more reflective of the overall rental environment, given the substantial owner-occupied presence. Furthermore, the lack of data on DOM implies either a robust local market or a scarcity of rental listings, both of which could influence rental rates.
In the scenario where the FMR is used, the potential annual rental income would be higher at $11,040 compared to the market rent of $9,348. However, the reality of the situation is likely closer to the market rent figure, considering the renter density and the absence of DOM data. Investors should use these figures to calculate their own Net Operating Income (NOI) and determine the feasibility of properties under Section 8 versus market conditions.
Conclusion: For ZIP 62874, the Section 8 program offers a higher annual rental income at $11,040 for a two-bedroom apartment. In contrast, the market rent stands at $9,348 annually. Given the limited data on median home values and DOM, the market rent appears more realistic for investment analysis, especially when factoring in the 25.5% renter density. This gross-yield comparison provides a baseline for further financial modeling by investors.
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.