Location: Gary, IN | Metro: Gary, 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 | $980 |
| 1 Bedroom | $1,040 |
| 2 Bedrooms | $1,260 |
| 3 Bedrooms | $1,530 |
| 4 Bedrooms | $1,670 |
| 5 Bedrooms | $1,937 |
| 6 Bedrooms | $2,169 |
| 7 Bedrooms | $2,343 |
| 8 Bedrooms | $2,460 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,260 | $70,303 | 1.79% | A+ |
| 3BR | $1,530 | $91,042 | 1.68% | A+ |
| 4BR | $1,670 | $119,984 | 1.39% | A |
U.S. Census Bureau data (2024)
A skeptical investor considering real estate investments in ZIP code 46406, located in Gary, Indiana, might raise several valid concerns. Here are some key objections and the corresponding analysis based on the available data.
Objection 1: Will Fair Market Rent (FMR) of $1120 cover the mortgage on a home priced at $79,537?
The FMR of $1120 for ZIP 46406 in fiscal year 2024 provides a benchmark for rental rates, but it does not directly correlate with the ability to cover a mortgage payment on a property valued at $79,537. To determine if the FMR can support a mortgage, one must consider the interest rate, loan term, and down payment amount. Assuming a typical 30-year fixed-rate mortgage with a 4% interest rate and a 20% down payment, the monthly mortgage payment would be approximately $275. This amount is well below the $1120 FMR, indicating that the rent could indeed cover the mortgage and provide a margin for other expenses such as maintenance and property taxes.
Objection 2: Is there enough renter demand at 52.0%?
The 52.0% renter occupancy rate in ZIP 46406 suggests a moderate level of demand. However, this figure alone does not provide a complete picture of the rental market's health. A deeper analysis would involve looking at the vacancy rate and the trend in rental demand over time. If the vacancy rate is low and the demand is growing, the 52.0% occupancy rate could be considered sufficient. Conversely, if the vacancy rate is high and demand is declining, this percentage might indicate weak demand. The data provided does not offer these additional insights, so further investigation into local trends is necessary to make a definitive judgment.
Objection 3: Will vouchers keep pace with $995 market rents?
Voucher usage is a critical factor in areas with significant affordable housing needs. In ZIP 46406, the market rent stands at $995. To assess whether vouchers will keep pace with this figure, we need to look at the voucher payment standards set by the Housing Choice Voucher program. The voucher program adjusts its payment standards annually based on local market conditions. For ZIP 46406, the voucher payment standard is likely to be close to the FMR of $1120. Therefore, vouchers should be able to cover the $995 market rent, leaving a buffer for landlords. However, the actual number of vouchers available and their distribution among properties is not specified in the data, which means that while vouchers can theoretically cover the rent, the practical availability may vary.
In summary, the FMR of $1120 is likely to cover the mortgage on a $79,537 home, given typical financing terms. The 52.0% renter occupancy rate indicates a moderate level of demand, but requires further context to fully evaluate. Lastly, vouchers should generally keep pace with the $995 market rents, though the precise number and distribution of vouchers remain unclear without additional data.
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.