Location: St. Clair County, MO | Metro: Henry County, MO
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 | $710 |
| 1 Bedroom | $760 |
| 2 Bedrooms | $990 |
| 3 Bedrooms | $1,240 |
| 4 Bedrooms | $1,390 |
| 5 Bedrooms | $1,612 |
| 6 Bedrooms | $1,805 |
| 7 Bedrooms | $1,949 |
| 8 Bedrooms | $2,046 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $990 | $158,086 | 0.63% | D |
| 3BR | $1,240 | $260,944 | 0.48% | F |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 64740 in Missouri reveals a distinct gap between the federal market rent (FMR) and the actual market rent, which has significant implications for potential investors.
Annualizing the two-bedroom FMR of $890 for fiscal year 2026 yields an annual rental income of $10,680. Given the median home value of $222,734, the implied gross yield for the FMR scenario is approximately 4.8%. This calculation is based on the formula: Gross Yield = (Annual Rental Income / Property Value) * 100. In contrast, using the market rent figure of $661 from the Census ACS, the annual rental income drops to $7,932, resulting in a gross yield of about 3.6%.
The disparity between these two gross yields highlights the potential financial impact of relying on Section 8 rents versus market rents. The higher FMR of $890 represents a more optimistic scenario, but it is important to consider the reality of the local rental market.
Given the 8.6% renter density in ZIP 64740, it's reasonable to expect that a significant portion of the rental market is composed of tenants who may be eligible for Section 8 assistance. However, the N/A-day days on market (DOM) suggests that there might be limited data available regarding how quickly properties are rented out under Section 8, which could affect the overall investment strategy.
In practice, the market rent figure of $661 is likely more reflective of what landlords can realistically expect to receive from Section 8 tenants. While the FMR of $890 provides a higher gross yield, the actual performance of rental properties in this area is better aligned with the lower market rent figure. Therefore, investors should focus on the 3.6% gross yield when evaluating potential returns in ZIP 64740.
To summarize, the cap rate analysis shows a gross yield of 4.8% based on the FMR and 3.6% based on the market rent. For a practical investment approach, the 3.6% gross yield is more realistic, considering the local rental market conditions and the limited availability of specific data on Section 8 rental performance.
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.