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 | $1,390 |
| 1 Bedroom | $1,480 |
| 2 Bedrooms | $1,800 |
| 3 Bedrooms | $2,490 |
| 4 Bedrooms | $2,800 |
| 5 Bedrooms | $3,248 |
| 6 Bedrooms | $3,638 |
| 7 Bedrooms | $3,929 |
| 8 Bedrooms | $4,125 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,800 | $606,764 | 0.3% | F |
| 3BR | $2,490 | $491,348 | 0.51% | F |
| 4BR | $2,800 | $660,531 | 0.42% | F |
U.S. Census Bureau data (2024)
The Section 8 thesis for ZIP code 68520 in Lincoln, Nebraska, is centered around the discrepancy between the Fair Market Rent (FMR) and the actual market rent. For fiscal year 2024, the FMR is set at $1,600, while the Zillow Observed Rent Index (ZORI) indicates a market rent of $1,376. This creates a gap of $224, which represents a 16.3% difference between what voucher tenants can be charged and the prevailing market rate.
Given that the FMR exceeds the market rent, landlords and small-portfolio investors should consider this scenario as a yield play. The higher FMR allows property owners to receive a greater amount per unit compared to the open-market rental rates. This means that even though the market rent is lower, landlords can still benefit financially by participating in the Section 8 program. They will receive a consistent income stream that is above the average market rent, enhancing their investment yields.
In the broader context of Lincoln, where 26.9% of residents are renters, the median home value stands at $588,171 and the median income is $94,244. These figures highlight the economic landscape in which the Section 8 program operates. With a significant portion of the population renting and a relatively high median home value, the need for affordable housing solutions is evident. The Section 8 program helps bridge this affordability gap by subsidizing rents for eligible low-income families.
However, it's important to note the implications of housing voucher tenants below open-market rates. While the FMR provides a higher rental income than the market rate, landlords must also consider the administrative aspects and potential maintenance costs associated with voucher tenants. The program requires adherence to specific regulations and standards, which can affect the overall management of properties.
To summarize, the Section 8 opportunity in ZIP 68520 presents itself as a yield play due to the FMR being higher than the market rent. Landlords can leverage this gap to secure a better financial return while contributing to the local community's need for affordable housing. Nonetheless, they should be prepared to manage the unique requirements and challenges that come with participating in the Section 8 program.
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.