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 | $1,160 |
| 1 Bedroom | $1,300 |
| 2 Bedrooms | $1,500 |
| 3 Bedrooms | $1,940 |
| 4 Bedrooms | $2,370 |
| 5 Bedrooms | $2,749 |
| 6 Bedrooms | $3,079 |
| 7 Bedrooms | $3,325 |
| 8 Bedrooms | $3,491 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,500 | $224,102 | 0.67% | D |
| 3BR | $1,940 | $320,199 | 0.61% | D |
| 4BR | $2,370 | $381,980 | 0.62% | D |
| 5BR | $2,749 | $434,442 | 0.63% | D |
U.S. Census Bureau data (2024)
A landlord considering Danville, IN (ZIP 46122) for a Section 8 investment must evaluate several factors to determine if the area is suitable. The first step involves calculating whether the Fair Market Rent (FMR) of $1,270 for the fiscal year 2024 can cover the debt service on a property valued at $343,677. This requires an understanding of the mortgage payment, including principal, interest, taxes, and insurance. If these costs are less than or equal to $1,270 per month, then the answer is yes; otherwise, it is no.
The second consideration is comparing the Zillow Observed Rent Index (ZORI), which stands at $1,949, against the FMR. Here, we see that the market rent is significantly higher than the FMR. This suggests that landlords could potentially command higher rents outside of Section 8, but it also indicates that relying solely on FMR might limit profitability.
The third factor to assess is the demand for rental properties. In Danville, the rental rate is 20.7% of the total housing stock, and the days on market (DOM) average is 20 days. These figures suggest a moderate demand for rentals. However, the viability of investing in Section 8 properties hinges on whether the demand is strong enough to sustain occupancy rates. Given the relatively low DOM, it implies that there is sufficient interest in the rental market, leading to a positive outlook on demand.
Decision Tree:
In conclusion, for a landlord focused on Section 8 properties, the key is ensuring that the FMR can cover the debt service. The high market rent compared to the FMR is a double-edged sword, offering potential for higher-paying tenants but complicating reliance on Section 8 alone. Sufficient demand exists based on the rental rate and DOM, but the final decision rests on the landlord's financial analysis and risk tolerance.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.