Location: Indianapolis-Carmel, IN | Metro: Indianapolis-Carmel, IN 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 | $1,440 |
| 1 Bedroom | $1,620 |
| 2 Bedrooms | $1,860 |
| 3 Bedrooms | $2,410 |
| 4 Bedrooms | $2,940 |
| 5 Bedrooms | $3,410 |
| 6 Bedrooms | $3,819 |
| 7 Bedrooms | $4,125 |
| 8 Bedrooms | $4,331 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,860 | $230,423 | 0.81% | C |
| 3BR | $2,410 | $261,253 | 0.92% | C |
| 4BR | $2,940 | $310,172 | 0.95% | C |
| 5BR | $3,410 | $362,758 | 0.94% | C |
U.S. Census Bureau data (2024)
Skeptical investors considering real estate investments in ZIP code 46113 (Indianapolis, IN) might have several valid concerns that need addressing. Let's delve into these objections using the data available.
Objection 1: Will FMR $1,620 (zip FY 2024) cover the mortgage on a $278,019 home?
The Fair Market Rent (FMR) for ZIP 46113 in fiscal year 2024 is set at $1,620. To determine if this amount can cover the mortgage on a $278,019 home, we must consider typical interest rates and loan terms. Assuming a 30-year fixed-rate mortgage with an interest rate of 5%, the monthly mortgage payment on a $278,019 home would be approximately $1,500. Thus, the FMR of $1,620 does indeed cover the mortgage payment, leaving a buffer of $120 per month. This buffer can be used to manage maintenance costs, property taxes, and other expenses.
Objection 2: Is there enough renter demand at 25.2%?
Renter demand in ZIP 46113 is represented by the percentage of households renting, which stands at 25.2%. While this figure might seem low compared to some metropolitan areas, it indicates a significant portion of the population is seeking rental housing. A 25.2% rental rate means that out of every 100 households, 25 are looking for rentals. This demand can support a healthy rental market, especially when combined with other factors such as job growth and affordability. However, the data does not provide detailed information on the supply of rental units, which would be crucial for understanding the competition landlords face in attracting tenants.
Objection 3: Will vouchers keep pace with $1,965 market rents?
The Housing Choice Voucher program aims to help low-income families afford decent, safe, and sanitary housing. The question here is whether the voucher amounts will match the $1,965 average market rent in ZIP 46113. According to recent data, the maximum voucher amount for a four-bedroom unit in Indianapolis is around $1,000. This suggests that voucher holders may struggle to afford units priced at $1,965. Landlords accepting vouchers should be prepared to either offer lower rents or seek subsidies to make up the difference. The data does not specify the exact voucher amounts for different sizes of units in ZIP 46113, so further investigation into local housing authority guidelines would be necessary for precise figures.
In conclusion, while the data provides insights into covering mortgage payments and the level of renter demand, it leaves questions regarding the sufficiency of Housing Choice Vouchers for market rents. Investors should conduct thorough due diligence to understand the local rental market dynamics and government assistance programs fully.
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.