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 | $1,210 |
| 1 Bedroom | $1,360 |
| 2 Bedrooms | $1,560 |
| 3 Bedrooms | $2,020 |
| 4 Bedrooms | $2,460 |
| 5 Bedrooms | $2,854 |
| 6 Bedrooms | $3,196 |
| 7 Bedrooms | $3,452 |
| 8 Bedrooms | $3,625 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,560 | $234,331 | 0.67% | D |
| 3BR | $2,020 | $292,631 | 0.69% | D |
| 4BR | $2,460 | $402,493 | 0.61% | D |
| 5BR | $2,854 | $701,197 | 0.41% | F |
U.S. Census Bureau data (2024)
The market analysis for Section 8 investors in ZIP code 46260, located in Indianapolis, IN, Marion County, reveals several key points. The HUD Fair Market Rent (FMR) for the area, set at $1380 for FY 2024, exceeds the market rent as measured by Zillow's Observed Rental Index (ZORI), which stands at $1,168. This means that landlords participating in the Section 8 program can expect to cashflow positively at the HUD FMR, as the voucher amount surpasses the average rental rate in the area.
To further contextualize this data, the median home value in ZIP 46260 is $304,685. Using this figure, we can calculate the rent-to-price ratio, which is approximately 0.45%. This low ratio suggests that the area is more favorable for renting rather than buying, given the relatively high cost of homeownership compared to rental income.
The rental market in ZIP 46260 is also characterized by a swift turnover, with a median Days on Market (DOM) of just 19 days. Additionally, the price-cut share is only 0.2%, indicating that rental properties are typically rented at or near their asking price without significant negotiation. These factors point to a strong demand for rental housing, which benefits landlords by ensuring consistent occupancy rates and minimizing vacancy periods.
The positive cashflow potential for Section 8 landlords, combined with the robust rental market dynamics, makes cashflow the strongest investor angle in ZIP 46260. Landlords can rely on steady rental income that consistently outpaces the local market rates, providing a reliable source of passive income without the need for property appreciation or stability as primary investment goals.
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.