Section 8 Fair Market Rent (FMR) for ZIP 46123 - 2027

Investment Score for ZIP 46123

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	$1,480
1 Bedroom	$1,660
2 Bedrooms	$1,910
3 Bedrooms	$2,480
4 Bedrooms	$3,010
5 Bedrooms	$3,492
6 Bedrooms	$3,911
7 Bedrooms	$4,224
8 Bedrooms	$4,435

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
2BR	$1,910	$252,775	0.76%	D
3BR	$2,480	$319,026	0.78%	D
4BR	$3,010	$408,169	0.74%	D
5BR	$3,492	$448,485	0.78%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 46123 (Avon, IN) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for Avon, IN, as of 2026, is set at $1850 for a two-bedroom unit. This represents 21.5% of the median household income of $103,485. However, the actual rental market in Avon is significantly higher. According to Zillow, the median price for a two-bedroom home is $249,177, which translates into a monthly rent that is approximately 11.2 times the FMR. This means that the typical rent for a two-bedroom unit in Avon would be around $20,600 annually ($1717 per month), far exceeding the FMR of $1850. Given these figures, there are significant constraints for voucher holders. The FMR is designed to cover the cost of housing for low-income families, but in Avon, it is likely that many landlords will not accept vouchers due to the substantial gap between the FMR and the actual rental rates. For instance, a voucher holder might struggle to find a landlord willing to accept a payment of $1850 when the market rate is closer to $1717. This makes it challenging for Section 8 voucher recipients to secure housing in Avon. #### Affordability & Renter Profile Avon has a relatively small renter population, with only 19.6% of households being renters. The occupancy rate stands at 96.8%, indicating that the market is quite tight. Given the high median household income and the limited number of renters, it is likely that those who do rent in Avon are either young professionals or individuals who have chosen to rent rather than buy due to personal preferences or financial flexibility. The affordability issue is stark. With the FMR for a two-bedroom unit at $1850, which is only 21.5% of the median household income, it suggests that most residents can afford to pay much more for rent. In fact, the average renter would need to pay about $1717 per month to match the market rate, which is still a significant portion of their income. This tight market, combined with high rental prices, means that finding affordable housing is a challenge for lower-income residents, especially those relying on Section 8 vouchers. #### Investor Angle From an investor's perspective, the ZIP code 46123 presents both opportunities and challenges. The FMR for a two-bedroom unit is $1850, while the actual market rent is closer to $1717. This indicates that if an investor were to purchase a property and rent it out at the FMR, they would likely be undercharging compared to the market rate. However, the investment grade in Avon is strong due to the high median household income and the tight rental market. Investors who are willing to accept Section 8 vouchers might find it difficult to generate positive cash flow, given the significant difference between the FMR and the market rent. For example, a two-bedroom unit rented at the FMR of $1850 would be significantly below the market rate of $1717, resulting in a potential loss of over $300 per month. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high disparity between FMR and market rates, investors should consider focusing on smaller units such as one-bedroom apartments. The FMR for a one-bedroom unit is $1590, which is closer to the market rate and could potentially offer better cash flow. This would also align with the limited number of renters in the area, making it easier to fill smaller units. 2. **Target Lower-Income Areas Nearby**: If the goal is to maximize cash flow while still serving the needs of lower-income families, investors might want to look at nearby areas with similar demographics but lower rental costs. For instance, neighboring ZIP codes with slightly lower median incomes might have more competitive rental prices, allowing for better alignment between FMR and market rates. 3. **Consider Mixed-Income Developments**: Another approach could be developing mixed-income properties where some units are rented at market rates and others are rented at FMR. This strategy can help balance the financial impact of accepting Section 8 vouchers by offsetting the lower rents with higher-paying tenants. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP 46123 (Avon, IN) is to **skip** this market. The high disparity between FMR and market rents, along with the tight rental market, makes it difficult to achieve positive cash flow. Additionally, the limited number of renters and the high median household income suggest that the demand for affordable housing is not as strong as in other areas. Investors looking to serve the needs of lower-income families would be better served by targeting areas with more competitive rental prices and a larger proportion of renters. In summary, while Avon offers a strong investment environment overall due to its high median income and occupancy rates, it is not an ideal location for Section 8-focused investments. The market dynamics make it challenging to find a balance between affordability and profitability.

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.