Location: Ellis County, KS | Metro: Ellis 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 | $720 |
| 1 Bedroom | $800 |
| 2 Bedrooms | $1,040 |
| 3 Bedrooms | $1,420 |
| 4 Bedrooms | $1,740 |
| 5 Bedrooms | $2,018 |
| 6 Bedrooms | $2,260 |
| 7 Bedrooms | $2,441 |
| 8 Bedrooms | $2,563 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $800 | $93,991 | 0.85% | C |
| 2BR | $1,040 | $155,942 | 0.67% | D |
| 3BR | $1,420 | $235,930 | 0.6% | D |
| 4BR | $1,740 | $277,361 | 0.63% | D |
| 5BR | $2,018 | $338,994 | 0.6% | F |
U.S. Census Bureau data (2024)
A skeptical investor considering the ZIP code 67601, located in Hays, Kansas, might raise several valid concerns regarding the feasibility of investing in this area through the lens of Section 8 housing. Here, we address these concerns with the available data.
Objection 1: Will Fair Market Rent (FMR) of $940 (for the fiscal year 2026) cover the mortgage on a home priced at $254,479?
The FMR of $940 does not directly indicate whether it will cover the mortgage payments on a $254,479 home. To accurately assess this, we need to calculate the monthly mortgage payment based on typical interest rates and loan terms. Assuming a 30-year fixed-rate mortgage at an average interest rate of 4.5%, the monthly principal and interest payment would be approximately $1,250. This amount exceeds the FMR, suggesting that additional income sources or rental adjustments might be necessary to ensure profitability.
Objection 2: Is there enough renter demand at 38.5%?
The renter demand figure of 38.5% indicates that nearly 4 out of every 10 households in ZIP 67601 are renters. While this percentage is significant, it does not provide a complete picture of the rental market's health. To better understand the demand, we should consider factors such as vacancy rates, population growth, and the local economy. However, the data at hand does not offer these specifics. A 38.5% rental rate suggests a substantial market, but further investigation into the stability and growth of the rental sector is warranted.
Objection 3: Will vouchers keep pace with market rents of $936?
The FMR of $940 closely aligns with the market rent of $936, indicating that voucher holders can generally afford the average rental price. This parity suggests that vouchers are likely to keep pace with market rents, supporting the affordability of rental units for those utilizing Section 8 assistance. Nonetheless, it is crucial to monitor any changes in voucher policies or funding levels that could affect this balance.
In conclusion, while the data provides some insights into the viability of investing in ZIP 67601 under Section 8, it also highlights areas where further research is needed. The FMR does not fully cover the mortgage on a $254,479 home, pointing to potential financial challenges. The 38.5% renter demand suggests a healthy market, but more detailed economic indicators are required for a comprehensive analysis. Lastly, the current alignment between FMR and market rents indicates that vouchers are keeping pace, though ongoing vigilance is advised.
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.