Location: Washington County, MO | Metro: St. Louis, MO-IL HUD Metro FMR Area
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 | $840 |
| 1 Bedroom | $870 |
| 2 Bedrooms | $1,060 |
| 3 Bedrooms | $1,360 |
| 4 Bedrooms | $1,570 |
| 5 Bedrooms | $1,821 |
| 6 Bedrooms | $2,040 |
| 7 Bedrooms | $2,203 |
| 8 Bedrooms | $2,313 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,060 | $176,748 | 0.6% | F |
| 3BR | $1,360 | $255,605 | 0.53% | F |
| 4BR | $1,570 | $313,186 | 0.5% | F |
U.S. Census Bureau data (2024)
The Section 8 thesis in ZIP code 63020, centered around De Soto, Missouri, is defined by the discrepancy between the Fair Market Rent (FMR) and the actual market rent. For fiscal year 2024, the FMR is set at $1020, while the Census ACS data indicates an average market rent of $847. This creates a gap of $173, or approximately 20.4%, between what landlords can charge under the Section 8 program and the prevailing market rate.
Given that the FMR exceeds the market rent, this scenario presents a compelling yield play for landlords and small-portfolio investors. The higher FMR allows landlords to receive rental payments that are above the local market average, thus potentially increasing their profitability. This is particularly advantageous in a region where only 19.9% of residents are renters, suggesting a relatively stable demand for rental properties. Additionally, the median home value of $242,225 and median income of $70,824 indicate a community with moderate economic stability, which supports the viability of attracting voucher tenants.
The key benefit here is that landlords can capitalize on the government subsidy without necessarily having to compete with the lower market rents. However, it's important to note that this strategy also comes with the administrative overhead associated with managing Section 8 properties, such as compliance with HUD standards and potential delays in receiving rental payments.
To summarize, the $173 differential between the FMR and the market rent in ZIP 63020 represents a significant opportunity for landlords and small-portfolio investors to enhance their rental yields through the Section 8 program. This gap is especially favorable in the context of De Soto, where the economic indicators suggest a stable environment for rental investments.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.