Section 8 Fair Market Rent (FMR) for ZIP 46074 - 2027

Investment Score for ZIP 46074

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	$1,640
1 Bedroom	$1,840
2 Bedrooms	$2,120
3 Bedrooms	$2,750
4 Bedrooms	$3,350
5 Bedrooms	$3,886
6 Bedrooms	$4,352
7 Bedrooms	$4,700
8 Bedrooms	$4,935

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	$2,120	$360,127	0.59%	F
3BR	$2,750	$442,679	0.62%	D
4BR	$3,350	$544,587	0.62%	D
5BR	$3,886	$707,345	0.55%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 46074 (Westfield, IN) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 46074 in Westfield, Indiana, is set by HUD for 2026. For a two-bedroom unit, the FMR is $1,900 per month. However, the Zillow median price for a two-bedroom home in this area is $357,891, which translates to a price-to-FMR ratio of 15.7 times. This indicates that the actual rent prices are significantly higher than the FMR, creating a challenging environment for Section 8 voucher holders. The voucher program aims to provide affordable housing options, but with actual rents far exceeding the FMR, many voucher holders may struggle to find suitable units within their budget. Additionally, landlords have the discretion to accept or reject vouchers, and the high disparity between FMR and actual rents might discourage some from participating in the program. #### Affordability & Renter Profile ZIP code 46074 has a relatively affluent population, with a median household income of $126,724. Given that 18.4% of the population are renters, it suggests that there is a smaller segment of the community relying on rental properties. The occupancy rate of 95.8% indicates that the rental market is quite tight, with very few vacant units available. This tight market can lead to higher competition among renters, pushing up rental prices even further. The median income also provides context for affordability; for instance, a two-bedroom unit's FMR represents only 18.0% of the median household income, making it relatively affordable for those earning the median income. However, for lower-income individuals who might rely on Section 8 vouchers, the gap between FMR and actual rents can be substantial, limiting their ability to secure housing in this area. #### Investor Angle From an investor’s perspective, the ZIP code 46074 presents a mixed picture. While the occupancy rate is high, indicating strong demand for rental properties, the actual rents are much higher than the FMR. This means that if an investor is looking to operate strictly within the FMR guidelines, they would likely face challenges in generating positive cash flow due to the high costs associated with owning and maintaining properties in this area. The price-to-FMR ratio of 15.7x suggests that the market is overpriced relative to what HUD considers fair, making it difficult to compete with non-voucher tenants who can afford higher rents. The investment grade for this ZIP code would be considered low for Section 8-focused investors. The primary constraint is the significant difference between the actual rent prices and the FMR, which could result in limited profitability unless the investor can find ways to reduce operational costs or increase occupancy rates. #### Specific Actionable Insights 1. **Target Lower-Rent Properties**: Investors should focus on acquiring properties that are priced closer to the FMR. For example, a two-bedroom unit priced at $1,900 per month would be more attractive to Section 8 voucher holders compared to units priced at $3,578 per month (the equivalent of the Zillow median price divided by 15.7). This strategy can help maximize the chances of securing tenants and achieving stable cash flows. 2. **Consider Smaller Units**: Given the high price-to-FMR ratio, smaller units such as one-bedroom apartments may be more aligned with the FMR. For instance, the FMR for a one-bedroom unit is $1,630, which is still significantly below the Zillow median price. Investing in smaller units could provide better alignment with the voucher program and potentially attract a broader range of tenants. 3. **Engage with Local Landlords**: Building relationships with local landlords and property managers can be beneficial. They may have insights into how to navigate the high-cost environment while still attracting Section 8 voucher holders. Engaging with them can also help understand the local rental dynamics and identify potential opportunities for improvement or negotiation. #### Bottom Line Given the high price-to-FMR ratio and the tight rental market, the recommendation for Section 8-focused investors in ZIP code 46074 is to **Skip**. The significant gap between actual rents and the FMR makes it challenging to achieve positive cash flow without compromising on the quality of the properties. Additionally, the affluent nature of the area and the small percentage of renters suggest that the demand for affordable housing is limited, reducing the likelihood of finding consistent Section 8 tenants. Investors should consider other ZIP codes where the FMR is more closely aligned with actual rents, providing a more favorable environment for both cash flow and tenant acquisition.

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.