Section 8 Fair Market Rent (FMR) for ZIP 46383 - 2027

Investment Score for ZIP 46383

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	$1,150
1 Bedroom	$1,210
2 Bedrooms	$1,470
3 Bedrooms	$1,790
4 Bedrooms	$1,950
5 Bedrooms	$2,262
6 Bedrooms	$2,533
7 Bedrooms	$2,736
8 Bedrooms	$2,873

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
1BR	$1,210	$168,649	0.72%	D
2BR	$1,470	$238,203	0.62%	D
3BR	$1,790	$333,973	0.54%	F
4BR	$1,950	$430,276	0.45%	F
5BR	$2,262	$531,753	0.43%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 46383 (Valparaiso, IN) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 46383 in Valparaiso, IN, is set by HUD for 2026. For a two-bedroom unit, the FMR is $1350 per month. This figure represents approximately 21.3% of the median household income in the area, which stands at $76,224. However, it is important to note that the actual rental market in Valparaiso significantly exceeds these FMRs. The Zillow median price for a two-bedroom home is $234,418, which translates to a price-to-FMR ratio of 14.5 times. This means that the actual rent prices are much higher than the FMRs, creating a significant gap between what voucher holders can afford and the market rates. Voucher holders face constraints due to this disparity. They may struggle to find units that accept their vouchers, as landlords might prefer higher-paying tenants who do not require government subsidies. Additionally, the limited number of units available at or below FMR could lead to increased competition among voucher holders, potentially driving up wait times and reducing housing options. #### Affordability & Renter Profile In ZIP code 46383, 34.3% of the population are renters, indicating a substantial demand for rental properties. With a median household income of $76,224, the majority of residents have the financial capability to afford market-rate rentals. However, the 21.3% of median income required for a two-bedroom unit under the FMR suggests that lower-income families might find it challenging to secure affordable housing without assistance. Given the occupancy rate of 93.5%, the rental market appears to be relatively tight, with few vacant units available. This high occupancy rate indicates strong demand and suggests that landlords have a competitive advantage in setting higher rent prices. The tight market conditions could also contribute to the difficulty voucher holders face in finding suitable housing. #### Investor Angle From an investor perspective, the ZIP code 46383 offers potential opportunities but also challenges. At the FMR of $1350 for a two-bedroom unit, the cash flow for rental properties would likely be positive, considering the high occupancy rate and strong demand. However, the actual market rent for a similar property is significantly higher, at around $234,418 based on Zillow’s median price, which translates to a monthly rent of approximately $1953 if we assume a typical mortgage payment structure. This implies that investors who rely solely on FMRs might struggle to compete with market rates and could face difficulties in attracting tenants. The investment grade for this ZIP code would be moderate to good, given the strong demand and high occupancy rates. However, investors should be aware of the potential risks associated with relying on Section 8 vouchers, including the possibility of longer vacancy periods and the need to comply with federal regulations. The tight market conditions suggest that there is room for well-managed, affordable rental properties, but investors must carefully consider the balance between FMR and market rates. #### Specific Actionable Insights 1. **Target Affordable Units**: Investors should focus on acquiring or developing units that are priced close to the FMR levels. A two-bedroom unit priced at $1350 per month would be attractive to both voucher holders and lower-income families, ensuring a steady stream of tenants. This strategy can help mitigate the risk of vacancy and provide a more stable cash flow. 2. **Consider Mixed-Income Developments**: Given the high market rent prices, investors could explore mixed-income developments where some units are priced at FMR levels and others at market rates. This approach allows investors to cater to a broader range of tenants while still benefiting from the higher rents paid by those who can afford them. For instance, a development with a mix of $1350 FMR units and $1953 market-rate units could achieve a balanced occupancy and revenue. 3. **Engage with Local Housing Authorities**: To ensure a steady pipeline of tenants, investors should engage with local housing authorities and understand the process of becoming a Section 8 landlord. This includes familiarizing themselves with the requirements and benefits of accepting vouchers, such as guaranteed rent payments and potential tax incentives. #### Bottom Line For Section 8-focused investors, the ZIP code 46383 presents a mixed picture. While the high demand and occupancy rates suggest a robust rental market, the significant gap between FMR and market rents poses challenges. The recommendation is to **Hold** or cautiously **Buy**, focusing on affordable units that align with FMR levels. Investors should also consider mixed-income developments to diversify their tenant base and revenue streams. Engaging with local housing authorities is crucial for success in this niche market. Overall, the investment potential is promising but requires careful planning and execution to navigate the complexities of the 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.