Location: Rush County, IN | Metro: Fayette County, IN
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 | $760 |
| 1 Bedroom | $820 |
| 2 Bedrooms | $1,020 |
| 3 Bedrooms | $1,250 |
| 4 Bedrooms | $1,360 |
| 5 Bedrooms | $1,578 |
| 6 Bedrooms | $1,767 |
| 7 Bedrooms | $1,908 |
| 8 Bedrooms | $2,003 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,250 | $289,899 | 0.43% | F |
U.S. Census Bureau data (2024)
The Section 8 analysis for ZIP code 46127 reveals a significant gap between the Fair Market Rent (FMR) and the actual market rent. The FMR for the metro area in fiscal year 2026 is set at $980, while the Census ACS reports the average market rent at $587. This means there is a $393 difference, or approximately 67%, between what the government deems as fair market rent and the current market rate.
Given that the FMR exceeds the market rent, landlords and small-portfolio investors should view this as an opportunity to achieve higher yields through voucher tenants. Voucher holders can cover the higher FMR, making it possible for property owners to charge closer to the $980 benchmark without worrying about vacancies. This is particularly advantageous in ZIP 46127 where 42.3% of residents are renters, indicating a substantial demand for affordable housing.
The median home value in the area stands at $247,212, which contrasts sharply with the median income of $52,639. This suggests that many residents face financial constraints when it comes to housing costs. By leveraging the Section 8 program, landlords can cater to these financially constrained renters while maintaining profitability. The gap between the FMR and market rent allows investors to capitalize on the government's willingness to pay higher rates, thus enhancing their cash flow and investment returns.
In summary, the disparity between the FMR and market rent in ZIP 46127 presents a clear strategy for landlords and small-portfolio investors. Charging rents aligned with the FMR of $980, rather than the lower market rate of $587, will result in a more favorable financial outcome. This approach is supported by the high percentage of renters and the overall economic context of the region, making it a smart move for those looking to maximize their investment yields.
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.