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 | $1,140 |
| 1 Bedroom | $1,290 |
| 2 Bedrooms | $1,480 |
| 3 Bedrooms | $1,920 |
| 4 Bedrooms | $2,340 |
| 5 Bedrooms | $2,714 |
| 6 Bedrooms | $3,040 |
| 7 Bedrooms | $3,283 |
| 8 Bedrooms | $3,447 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,290 | $83,023 | 1.55% | A+ |
| 2BR | $1,480 | $114,564 | 1.29% | A |
| 3BR | $1,920 | $215,953 | 0.89% | C |
| 4BR | $2,340 | $258,081 | 0.91% | C |
| 5BR | $2,714 | $285,626 | 0.95% | C |
U.S. Census Bureau data (2024)
The ZIP code 46221 in Indianapolis, Indiana presents an interesting scenario for both renters and landlords. The median income here stands at $65,280 per year, which translates to approximately $5,440 per month. Given the market rate for rent at $1,569 (ZORI), it would consume around 29% of a household’s monthly income. This is within the generally accepted range where rent should not exceed 30% of income, suggesting that renting at market rates is financially feasible for many households.
However, when comparing the market rate to the Fair Market Rent (FMR) standard set for the Housing Choice Voucher program at $1,320, a notable gap emerges. This means that landlords who accept vouchers will receive less than the market rate, potentially impacting their revenue. The FMR is designed to reflect the average rental cost for a modest home in the area, adjusted for the voucher program, but it does not always align with actual market conditions.
With 38.2% of the population being renters and a total population of 27,027, there is a significant demand for rental properties. However, the affordability gap between the market rate and the voucher payment standard could lead to increased competition among landlords. Those who opt to accept vouchers might attract a different segment of tenants, often those with more stable financial situations due to government assistance. On the other hand, landlords who choose to rent at market rates may cater to a broader range of tenants, including those without vouchers.
The takeaway for landlords is clear: accepting vouchers can be a strategic choice, particularly if targeting a more financially secure tenant base is a priority. However, it comes with the trade-off of lower rental income compared to market rates. Landlords must weigh the benefits of guaranteed payments against the potential for higher returns from cash-paying tenants. In ZIP 46221, the decision should consider the local economic conditions and the specific needs of the landlord's investment strategy.
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.