Section 8 Fair Market Rent (FMR) for ZIP 46033 - 2027

Investment Score for ZIP 46033

Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)

FY 2027 Fair Market Rent Rates

Unit Size	Monthly FMR
Studio	$1,670
1 Bedroom	$1,880
2 Bedrooms	$2,160
3 Bedrooms	$2,800
4 Bedrooms	$3,410
5 Bedrooms	$3,956
6 Bedrooms	$4,431
7 Bedrooms	$4,785
8 Bedrooms	$5,024

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
2BR	$2,160	$421,641	0.51%	F
3BR	$2,800	$491,784	0.57%	F
4BR	$3,410	$586,864	0.58%	F
5BR	$3,956	$834,339	0.47%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 46033 (Carmel, IN) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 46033 in Carmel, Indiana, is set by HUD for 2026. For a two-bedroom unit, the FMR is $2,070, which represents 16.2% of the median household income of $153,143. This suggests that the FMR is relatively affordable compared to the local income levels. However, the actual rental market in Carmel is significantly higher. The Zillow median price for a two-bedroom home is $417,541, which translates to a price-to-FMR ratio of 16.8x. This means that landlords would need to charge approximately $2,070 per month to break even on a property valued at the Zillow median price, assuming they can rent it out at market rates. Given these figures, there are significant constraints for voucher holders. The FMR is far below the actual market rents, making it challenging for Section 8 recipients to find units that accept their vouchers. Additionally, the high median household income indicates that most residents are likely homeowners rather than renters, further limiting the pool of available rental properties that might accept Section 8 vouchers. #### Affordability & Renter Profile The renter population in ZIP 46033 is only 12.2%, indicating a predominantly owner-occupied market. With a median household income of $153,143, the average renter must earn significantly above the national median income to afford housing in this area. The occupancy rate of 96.5% suggests that the rental market is tight, with very few vacant units available. This tightness could be due to the high cost of living and the limited number of rental properties relative to the overall housing stock. The high price-to-FMR ratio also implies that the rental market is highly competitive and expensive. Given that the FMR for a two-bedroom unit is $2,070, but the Zillow median price suggests a much higher market rent, it is clear that the rental market is not aligned with the FMR. This misalignment makes it difficult for low-income families to find affordable housing, especially those relying on Section 8 vouchers. #### Investor Angle From an investor’s perspective, the ZIP code 46033 presents a challenging environment for cash flow positive investments at FMR. The FMR for a two-bedroom unit is $2,070, while the Zillow median price suggests a market rent that is 16.8 times higher. This means that landlords would need to charge around $34,956 annually to cover the mortgage on a property priced at the Zillow median. However, the FMR limits the rent to $2,070 per month, or $24,840 annually, which is far below the required amount to make a profit. Given the high median household income and the limited number of renters, the investment grade for this ZIP code is low. Investors focusing on Section 8 vouchers would struggle to find enough tenants willing to pay the FMR, and the tight rental market means that landlords who do not accept vouchers can command much higher rents. Therefore, the potential for cash flow positive investments is minimal unless the investor can find undervalued properties or has a strategy to appeal specifically to the small percentage of renters in the area. #### Specific Actionable Insights 1. **Target Undervalued Properties**: Investors should focus on finding properties that are priced below the Zillow median. For example, if a two-bedroom unit is listed for $300,000 instead of $417,541, the monthly rent needed to break even would be approximately $1,725 ($300,000 * 16.8x / 12 months). This would be closer to the FMR of $2,070, making it more feasible to achieve cash flow positivity with Section 8 tenants. 2. **Appeal to High-Income Renters**: Since the majority of the population are homeowners, investors should consider marketing to high-income renters who are willing to pay above the FMR. This could involve offering luxury amenities or targeting professionals who prefer renting over buying due to lifestyle choices. For instance, a two-bedroom unit priced at $2,500 per month would still be below market rates but provide better returns than the FMR. 3. **Consider Multi-Family Units**: While the FMR for a two-bedroom unit is $2,070, the FMR for a three-bedroom unit is $2,680 and for a four-bedroom unit is $3,290. Investing in larger multi-family units might offer a better chance of attracting Section 8 tenants, as the FMR is higher and closer to the actual market rents. For example, a three-bedroom unit priced at $2,680 would be more attractive to landlords and could potentially generate better cash flow. #### Bottom Line Based on the provided data, the recommendation for Section 8-focused investors is to **Skip** ZIP code 46033. The high median household income and low renter population indicate that the market is not conducive to cash flow positive investments at the FMR. The tight rental market and high price-to-FMR ratio suggest that landlords would struggle to find enough tenants willing to pay the FMR, and the overall investment grade is poor. Investors looking to target Section 8 tenants should consider areas with a higher renter population and lower price-to-FMR ratios for better opportunities.

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.