Location: St. Louis, 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 | $1,300 |
| 1 Bedroom | $1,350 |
| 2 Bedrooms | $1,650 |
| 3 Bedrooms | $2,130 |
| 4 Bedrooms | $2,450 |
| 5 Bedrooms | $2,842 |
| 6 Bedrooms | $3,183 |
| 7 Bedrooms | $3,438 |
| 8 Bedrooms | $3,610 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,650 | $226,474 | 0.73% | D |
| 3BR | $2,130 | $315,088 | 0.68% | D |
| 4BR | $2,450 | $347,750 | 0.7% | D |
U.S. Census Bureau data (2024)
The potential risks for investing in Section 8 housing in ZIP code 63048, located in Herculaneum, Missouri, must be carefully considered. Firstly, tenant turnover is a significant issue, with the market rent at $1,774 compared to the Federal Market Rent (FMR) of $1,810 for fiscal year 2024. This slight disparity can lead to frequent changes in occupancy, which may result in increased administrative costs and maintenance needs.
Secondly, vacancy exposure is a concern due to the lack of data on days on market (DOM), indicating that there might be unpredictability regarding how long it takes to fill vacancies. This uncertainty can affect cash flow and profitability, especially if the property remains unoccupied for extended periods.
Lastly, deferred maintenance poses a threat given the typical home value of $299,598 and a median income of $92,109. Landlords must ensure that their properties meet the necessary standards set by the Housing Choice Voucher program, which can require substantial investments in maintenance and repairs. The gap between home values and median incomes suggests that tenants might have limited resources to contribute towards these costs, increasing the financial burden on the landlord.
However, these risks are offset by the high renter share of 9.9%, which typically indicates a higher demand for rental properties and Section 8 vouchers. A larger pool of potential tenants increases the likelihood of finding qualified applicants who can promptly occupy the property, thereby reducing vacancy periods and stabilizing cash flow.
In conclusion, the overall risk for a first-time Section 8 landlord in ZIP code 63048 is moderate.
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.