Location: Lincoln, NE | Metro: Lincoln, NE 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 | $820 |
| 1 Bedroom | $880 |
| 2 Bedrooms | $1,070 |
| 3 Bedrooms | $1,480 |
| 4 Bedrooms | $1,670 |
| 5 Bedrooms | $1,937 |
| 6 Bedrooms | $2,169 |
| 7 Bedrooms | $2,343 |
| 8 Bedrooms | $2,460 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,480 | $507,160 | 0.29% | F |
U.S. Census Bureau data (2024)
A skeptical investor looking at ZIP code 68402 might have several concerns regarding the feasibility of investing in properties under the Section 8 program. Let's address these concerns directly using the available data.
Will Fair Market Rent (FMR) of $1210 cover the mortgage on a $516,490 home?
The Fair Market Rent (FMR) for ZIP 68402 in fiscal year 2024 is set at $1210. This figure represents the maximum amount that HUD will pay for a rental unit to ensure it is affordable for low-income families. To determine if this FMR can cover the mortgage on a $516,490 home, we need to consider the average mortgage rate and terms. Assuming a 30-year fixed-rate mortgage at an interest rate of around 4%, the monthly payment for a $516,490 home would be approximately $2,500. Given the FMR of $1210, it is clear that the rent alone will not cover the mortgage payment. Landlords would need to seek additional income sources or accept a lower return on investment.
Is there enough renter demand at 15.8%?
The percentage of renters in ZIP 68402 is 15.8%. This figure indicates that a significant portion of the population is already renting, which could suggest some level of demand for rental properties. However, the percentage alone does not provide a complete picture of the market dynamics. We would need to know the total number of households in the area to understand the actual volume of potential renters. Additionally, the demand for Section 8 rental units specifically can vary widely based on local policies and the availability of housing assistance programs. The data does not specify the number of Section 8 participants in the area, making it difficult to gauge the exact demand for subsidized rentals.
Will vouchers keep pace with $915 market rents?
The average market rent for ZIP 68402 is $915. While the FMR of $1210 is higher, it is important to note that voucher amounts can vary and may not always reach the FMR. In areas where the cost of living is lower, vouchers tend to be closer to the actual market rent. However, the data does not provide specifics on how voucher amounts are adjusted over time or how frequently they are reviewed. Typically, HUD adjusts FMRs annually, but the pace at which vouchers increase can lag behind. Therefore, landlords should prepare for the possibility that voucher payments might not always match the full market rent, especially in years when adjustments are made.
In conclusion, while ZIP 68402 offers opportunities for landlords and small-portfolio investors interested in the Section 8 program, the data highlights some challenges. The FMR will not fully cover the mortgage on a $516,490 home, indicating a need for careful financial planning. The renter demand at 15.8% suggests some interest in rentals, but more detailed data is needed to assess the specific demand for Section 8 units. Lastly, the pace of voucher increases may not always align with market rent hikes, requiring landlords to be adaptable and potentially absorb some financial strain.
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.