Location: Nemaha County, KS | Metro: Topeka, KS MSA
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 | $830 |
| 2 Bedrooms | $1,060 |
| 3 Bedrooms | $1,380 |
| 4 Bedrooms | $1,500 |
| 5 Bedrooms | $1,740 |
| 6 Bedrooms | $1,949 |
| 7 Bedrooms | $2,105 |
| 8 Bedrooms | $2,210 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,380 | $243,141 | 0.57% | F |
U.S. Census Bureau data (2024)
A skeptical investor might question whether the Fair Market Rent (FMR) of $880 for ZIP 66550 can adequately cover the mortgage on a home priced at $189,478. To address this, we must consider the typical mortgage terms. Assuming a 30-year fixed-rate mortgage at an average interest rate of 4.5%, the monthly payment on a $189,478 home would be approximately $950. This means that the FMR falls short by about $70 per month. However, it's important to note that the FMR is a guideline and not a strict limit; many Section 8 participants can contribute additional income towards their rent.
The second objection is whether there is sufficient renter demand given that only 12.7% of the housing units in ZIP 66550 are rented. While this percentage suggests a relatively low rental market penetration, it does not necessarily indicate a lack of demand. The actual number of rental units is crucial to understanding the size of the potential tenant pool. Additionally, the demand for affordable housing can often exceed the supply, especially in areas where housing costs are rising faster than incomes. The data does not provide a direct measure of demand, so we must infer that a 12.7% rental rate could still support a viable investment if the property is well-managed and located in a desirable area.
Lastly, an investor might wonder if Housing Choice Vouchers will keep up with the market rents, which are currently at $867. The voucher amount is tied to the FMR and is adjusted annually based on changes in the local cost of living. If the FMR increases in line with market rents, then the voucher should cover the necessary rent. However, if market rents rise faster than the FMR, then there could be a gap. The data does not give us a projection of future FMR adjustments, so we cannot definitively say whether vouchers will always match the market. It's advisable to monitor local rental trends and FMR adjustments closely to ensure long-term financial stability.
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.