Location: Gasconade 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 | $780 |
| 1 Bedroom | $810 |
| 2 Bedrooms | $990 |
| 3 Bedrooms | $1,280 |
| 4 Bedrooms | $1,460 |
| 5 Bedrooms | $1,694 |
| 6 Bedrooms | $1,897 |
| 7 Bedrooms | $2,049 |
| 8 Bedrooms | $2,151 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $990 | $221,853 | 0.45% | F |
| 3BR | $1,280 | $281,266 | 0.46% | F |
| 4BR | $1,460 | $346,176 | 0.42% | F |
U.S. Census Bureau data (2024)
A skeptical investor considering ZIP 63037, Gerald, MO, might raise several concerns regarding the viability of investing in properties under the Section 8 program. Here are some of those objections addressed with the available data:
Objection 1: Will FMR $900 (zip FY 2024) cover the mortgage on a $247,887 home?
The Fair Market Rent (FMR) for ZIP 63037 in fiscal year 2024 is set at $900 per month. This figure represents the average monthly rent for a two-bedroom apartment, which is the typical unit size for a Section 8 voucher holder. To determine if this will sufficiently cover the mortgage on a $247,887 home, one must consider the prevailing interest rates and the loan term. Assuming a 30-year fixed-rate mortgage at an average rate of 5%, the monthly mortgage payment on a $247,887 home would be approximately $1343. Clearly, the FMR does not cover the entire mortgage amount, indicating that the landlord would need to rely on other sources of income or have additional capital to meet the shortfall.
Objection 2: Is there enough renter demand at 16.7%?
The rental vacancy rate for ZIP 63037 is reported at 16.7%. This percentage suggests that roughly one out of every six rental units is vacant. While this rate is higher than what might be considered ideal for maximizing occupancy and rental income, it still indicates a substantial number of renters in the area. A higher vacancy rate can be seen as an opportunity to attract tenants by offering competitive terms or improving property conditions. However, the data does not provide detailed insights into the tenant demographics or their ability to pay, which are critical factors in assessing demand.
Objection 3: Will vouchers keep pace with $828 market rents?
The current market rent for a two-bedroom apartment in ZIP 63037 is $828, slightly below the FMR. The question of whether vouchers will keep pace with market rents is crucial for ensuring stable income. Historically, the Housing Choice Voucher program adjusts its payments annually based on the local Fair Market Rents. Given that the FMR is slightly higher than the market rent, it's reasonable to expect that vouchers will continue to cover the majority of the rent for a two-bedroom unit. However, the data does not specify how frequently or by how much the vouchers are adjusted, which could impact long-term financial planning.
In summary, while ZIP 63037 presents certain challenges, such as the FMR not covering the full mortgage on a typical home and a relatively high vacancy rate, the alignment between market rents and FMR suggests a reasonable potential for covering operating costs through the Section 8 program. Investors should conduct further research to understand local trends and adjust their strategies accordingly.
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.