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 | $1,380 |
| 1 Bedroom | $1,560 |
| 2 Bedrooms | $1,790 |
| 3 Bedrooms | $2,320 |
| 4 Bedrooms | $2,830 |
| 5 Bedrooms | $3,283 |
| 6 Bedrooms | $3,677 |
| 7 Bedrooms | $3,971 |
| 8 Bedrooms | $4,170 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,560 | $222,502 | 0.7% | D |
| 2BR | $1,790 | $291,717 | 0.61% | D |
| 3BR | $2,320 | $349,234 | 0.66% | D |
| 4BR | $2,830 | $498,052 | 0.57% | F |
| 5BR | $3,283 | $705,830 | 0.47% | F |
U.S. Census Bureau data (2024)
The market analysis for Section 8 investors targeting ZIP code 46220 in Indianapolis, IN, reveals a competitive but manageable environment. The HUD Fair Market Rent (FMR) for ZIP 46220 is set at $1510 for fiscal year 2024. In comparison, the Zillow Observed Rent Index (ZORI) for the area stands at $1,529. This indicates that voucher tenants will generally cashflow at the FMR level, though with a slight margin. Landlords can expect a minor challenge in finding units that cashflow without adjustments, given the proximity of the ZORI to the FMR.
The median home value in ZIP 46220 is $340,500. Using this figure, we can derive a rent-to-price ratio. Assuming a mortgage rate of 4%, the monthly mortgage payment on a median-priced home would be approximately $1,375, which is below the ZORI of $1,529. This suggests that owning a property in this area for rental purposes is slightly more favorable than renting, especially when considering the long-term benefits of property ownership such as potential appreciation and equity build-up.
The rental market in ZIP 46220 shows a median Days on Market (DOM) of 9 days, indicating a relatively quick turnover for listings. Additionally, the price-cut share stands at 0.3%, suggesting that rental properties are generally priced accurately and do not require significant reductions to attract tenants. These factors point towards a stable rental market where demand is consistent and pricing is efficient.
Investors should note that while the cashflow potential is present, it may require a focus on premium units or strategic management to achieve optimal returns. However, the strong appreciation potential and stability of the market make it an attractive investment opportunity, particularly for those seeking long-term growth in their portfolio.
The strongest angle for Section 8 investors in ZIP 46220 is appreciation, due to the solid median home values and the favorable rent-to-price ratio.
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.