Section 8 Fair Market Rent (FMR) for ZIP 46240 - 2027

Location: Indianapolis-Carmel, IN | Metro: Indianapolis-Carmel, IN HUD Metro FMR Area

Investment Score for ZIP 46240

Monthly Rent (2BR)

$1,820

Median Price (2BR)

$280,301

1% Rule

0.65%

Annual Yield

7.79%

Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)

FY 2027 Fair Market Rent Rates

Unit Size	Monthly FMR
Studio	$1,410
1 Bedroom	$1,580
2 Bedrooms	$1,820
3 Bedrooms	$2,360
4 Bedrooms	$2,870
5 Bedrooms	$3,329
6 Bedrooms	$3,728
7 Bedrooms	$4,026
8 Bedrooms	$4,227

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
2BR	$1,820	$280,301	0.65%	D
3BR	$2,360	$354,083	0.67%	D
4BR	$2,870	$509,732	0.56%	F
5BR	$3,329	$992,500	0.34%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

Population

19,595

Median Household Income

$75,156

Housing Units

11,749

Renter Percentage

54.0%

Occupancy Rate

85.5%

Renter Occupied

5,426

The ZIP code 46240 is located in Indianapolis, Indiana, and represents a vibrant residential area with a mix of urban and suburban characteristics. This neighborhood is attractive to both renters and buyers due to its proximity to amenities and services typical of a major metropolitan area.

The Fair Market Rent (FMR) for ZIP 46240 in fiscal year 2024 is set at $1,600, providing a benchmark for rental pricing in the area.
The Zillow Observed Rent Index (ZORI) for the same area stands at $1,619, indicating that the actual market rent closely aligns with the FMR.
The median home value in ZIP 46240 is $363,794, reflecting a moderate price range for homeownership.
Renters make up 54.0% of the population, suggesting a strong demand for rental properties.
The Days on Market (DOM) for listings is 17 days, which is relatively quick, implying that properties are moving swiftly once they come onto the market.
The median household income in the area is $75,156, offering insight into the financial stability and spending power of residents.

Investors looking to enter the ZIP 46240 market should note the close alignment between the Fair Market Rent and the Zillow Observed Rent Index, indicating a stable rental environment. The high renter share suggests ongoing demand for rental properties, while the short Days on Market signals a competitive market where timely action can be rewarded. With median home values and incomes reflecting a middle-class demographic, there is a solid foundation for investment in both rental and homeownership opportunities. However, the slightly above average median home value may present challenges for first-time buyers, potentially driving continued demand for rental units. Overall, ZIP 46240 offers a balanced market with opportunities for steady returns, particularly in the rental sector.

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.