Location: Woodson County, KS | Metro: Elk County, KS
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 | $730 |
| 2 Bedrooms | $960 |
| 3 Bedrooms | $1,150 |
| 4 Bedrooms | $1,520 |
| 5 Bedrooms | $1,763 |
| 6 Bedrooms | $1,975 |
| 7 Bedrooms | $2,133 |
| 8 Bedrooms | $2,240 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $960 | $65,340 | 1.47% | A |
| 3BR | $1,150 | $139,156 | 0.83% | C |
| 4BR | $1,520 | $171,338 | 0.89% | C |
U.S. Census Bureau data (2024)
A skeptical investor looking at ZIP code 66736, Fredonia, Kansas, might have several concerns regarding the viability of investing in rental properties here, particularly under the Section 8 program. Let's address these objections head-on using the available data.
Objection 1: Will Fair Market Rent (FMR) of $880 (metro FY 2026) cover the mortgage on a $101,921 home?
The FMR of $880 is the maximum amount that a Section 8 tenant can pay for rent in the area. To determine if this covers the mortgage, we need to consider the typical mortgage payment for a home priced at $101,921. Assuming a 30-year fixed-rate mortgage at an average rate of 4.5%, and a 20% down payment, the monthly mortgage payment would be approximately $400. This leaves a significant gap between the FMR and the mortgage payment. However, it's important to note that the FMR only covers the rent portion; the government subsidy would fill the remainder of the mortgage payment, making the investment feasible despite the lower rent.
Objection 2: Is there enough renter demand at 26.3%?
The 26.3% represents the share of households that are renters in ZIP 66736. While this percentage might seem low compared to urban areas, it's crucial to understand the context. In smaller towns like Fredonia, the housing market dynamics are different. The rental demand, although not high in terms of percentage, could still support a limited number of rental units effectively. Moreover, the government subsidy ensures a stable tenant base, which is particularly valuable for small-portfolio investors. It's also worth noting that the rental market in rural areas tends to be less volatile and competitive, potentially leading to higher occupancy rates.
Objection 3: Will vouchers keep pace with $725 market rents?
The current market rent of $725 is slightly above the FMR of $880, suggesting that the voucher amounts might not fully cover the market rent. However, the Section 8 program adjusts voucher amounts annually based on changes in the FMR. If the FMR increases to match or exceed the market rent, the issue would be resolved. Investors should monitor the FMR adjustments closely to ensure they align with the local market conditions. Given the historical trend of gradual increases in FMR, it's reasonable to expect that the gap will narrow over time, but this cannot be guaranteed without future data.
In conclusion, while ZIP 66736 presents challenges such as a relatively low FMR and moderate rental demand, the stability provided by government subsidies makes it a viable option for landlords and small-portfolio investors. The potential mismatch between voucher amounts and market rents requires careful monitoring but does not necessarily preclude profitability.
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.