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 | $930 |
| 1 Bedroom | $970 |
| 2 Bedrooms | $1,180 |
| 3 Bedrooms | $1,510 |
| 4 Bedrooms | $1,750 |
| 5 Bedrooms | $2,030 |
| 6 Bedrooms | $2,274 |
| 7 Bedrooms | $2,456 |
| 8 Bedrooms | $2,579 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,510 | $341,627 | 0.44% | F |
U.S. Census Bureau data (2024)
A skeptical investor looking into ZIP 63357 might have several concerns regarding the viability of investing in properties through the Section 8 program. Let's address these concerns head-on with the available data.
Objection 1: Will Fair Market Rent (FMR) of $1290 cover the mortgage on a $340,954 home?
The FMR of $1290 for ZIP 63357 in fiscal year 2024 is a critical figure for determining whether an investment can be profitable under the Section 8 program. To assess if this amount will cover the mortgage, we need to consider the typical interest rates and loan terms. Assuming a standard 30-year fixed-rate mortgage at an average interest rate of around 5%, the monthly mortgage payment on a $340,954 home would be approximately $1850. Clearly, the FMR of $1290 does not cover the mortgage payment. However, it's important to note that property values and mortgage payments can vary widely based on the specific terms of the mortgage and the condition of the property. A lower-priced home or a more favorable mortgage rate could bring the monthly payment closer to the FMR.
Objection 2: Is there enough renter demand at 15.0%?
The rental vacancy rate of 15.0% for ZIP 63357 suggests a moderate level of demand. While a higher vacancy rate indicates less pressure on rents, it also means there is room for growth without necessarily increasing rent beyond what tenants can afford. In comparison, national averages for vacancy rates tend to hover around 7%, indicating that ZIP 63357 has a significantly higher rate. This could mean that landlords might struggle to fill units consistently. However, the presence of Section 8 as a reliable source of income can mitigate some of this risk, as long as the property meets the necessary standards to qualify for the program.
Objection 3: Will vouchers keep pace with $828 market rents?
The question of whether Section 8 vouchers will keep up with the market rent of $828 in ZIP 63357 is crucial. The FMR set by HUD is designed to reflect the local housing market conditions, ensuring that voucher amounts are adequate to cover the majority of rental costs. Given that the FMR for the area is $1290, which is higher than the market rent of $828, the voucher should theoretically cover the cost of renting a suitable property. However, the actual amount paid by a voucher can depend on the tenant's income and other factors, so it's possible that some adjustments may be needed to ensure the voucher covers the full rent. It's advisable to consult with local HUD offices to understand any potential discrepancies or changes in policy that could affect voucher amounts.
In conclusion, while the FMR of $1290 may not fully cover the mortgage on a $340,954 home, there are strategies to manage this gap. The 15.0% rental vacancy rate suggests a cautious approach to ensure consistent tenancy, but the reliability of Section 8 income can help stabilize the situation. Lastly, vouchers are likely to keep pace with the market rents of $828, but landlords should stay informed about any updates to the voucher system that could impact their cash flow.
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.