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 | $1,010 |
| 1 Bedroom | $1,140 |
| 2 Bedrooms | $1,310 |
| 3 Bedrooms | $1,700 |
| 4 Bedrooms | $2,070 |
| 5 Bedrooms | $2,401 |
| 6 Bedrooms | $2,689 |
| 7 Bedrooms | $2,904 |
| 8 Bedrooms | $3,049 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,310 | $131,232 | 1% | C |
| 3BR | $1,700 | $207,275 | 0.82% | C |
| 4BR | $2,070 | $262,446 | 0.79% | D |
| 5BR | $2,401 | $320,211 | 0.75% | D |
U.S. Census Bureau data (2024)
The ZIP code 46235 in Indianapolis, IN, presents a unique challenge for renters and landlords alike. The median income in this area stands at $58,951, which must cover the $1,647 market rate for rent, known as the ZORI (Zillow Observed Rent Index). This high market rate means that a significant portion of a household's annual income—nearly 35%—would go towards rent alone. For context, the Fair Market Rent (FMR) for ZIP 46235 in fiscal year 2024 is set at $1,140, reflecting the government's standard for housing assistance through vouchers.
The disparity between the market rate ($1,647) and the voucher payment standard ($1,140) highlights a substantial affordability gap for renters. Given that 46.5% of the 36,317 residents are renters, this gap significantly impacts the local rental market. Landlords who accept vouchers must be prepared to accept lower rents, but they also benefit from a guaranteed source of income and reduced vacancy rates. On the other hand, those focusing on cash-paying tenants face a more competitive market, as many households struggle to meet the higher market rates.
The takeaway for landlords is clear: accepting vouchers can provide a steady stream of income and minimize the risk of vacancies, particularly in a market where the majority of renters cannot afford the ZORI. However, landlords who aim to attract cash-paying tenants should consider offering competitive pricing closer to the FMR to remain attractive in the eyes of potential renters. Balancing these strategies based on the specific dynamics of ZIP 46235 will be key to success in this challenging yet promising rental market.
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.