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 | $1,780 |
| 1 Bedroom | $2,000 |
| 2 Bedrooms | $2,300 |
| 3 Bedrooms | $2,980 |
| 4 Bedrooms | $3,630 |
| 5 Bedrooms | $4,211 |
| 6 Bedrooms | $4,716 |
| 7 Bedrooms | $5,093 |
| 8 Bedrooms | $5,348 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,300 | $216,417 | 1.06% | B |
| 3BR | $2,980 | $284,029 | 1.05% | B |
| 4BR | $3,630 | $406,593 | 0.89% | C |
| 5BR | $4,211 | $681,638 | 0.62% | D |
U.S. Census Bureau data (2024)
A skeptical investor might question whether the Fair Market Rent (FMR) of $1,800 for ZIP 46236 (Lawrence, IN) in fiscal year 2024 will sufficiently cover the mortgage on a home priced at $327,422. To address this, let's consider the typical mortgage scenario. Assuming a 30-year fixed-rate mortgage at an average rate of 5%, the monthly payment on a $327,422 home would be approximately $1,750. This means that the FMR could indeed cover the mortgage payment, leaving some room for property taxes, insurance, and maintenance costs.
The second objection could be the low percentage of renters at 11.1%. However, this figure represents the share of households that are renters, which can vary widely across different areas. While it is true that the rental demand appears modest, it is important to note that this statistic does not account for the potential rental demand among non-household individuals such as students, young professionals, or those who choose to rent due to lifestyle preferences. Additionally, the rental vacancy rate is not provided, which would give us a clearer picture of the supply-demand balance in Lawrence, IN.
Lastly, an investor might wonder if housing vouchers will keep up with the market rents, currently at $1,807. The Housing Choice Voucher program, commonly known as Section 8, aims to provide rental assistance to low-income families. The voucher amount can fluctuate based on local market conditions and the availability of funds. In ZIP 46236, the average voucher amount is not specified in the data provided, making it difficult to definitively state whether vouchers will cover the market rents. It is advisable to consult the local Public Housing Agency (PHA) for the most accurate information regarding voucher amounts and their adequacy in covering market rents.
In summary, while the FMR of $1,800 could cover the mortgage on a $327,422 home, the rental demand at 11.1% requires further investigation into the rental vacancy rate and other demographic factors. As for the adequacy of housing vouchers, the specific data needed to make a determination is not available here, necessitating a direct inquiry to the local PHA.
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.