Location: Gary, IN | Metro: Gary, IN HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,040 |
| 1 Bedroom | $1,090 |
| 2 Bedrooms | $1,330 |
| 3 Bedrooms | $1,620 |
| 4 Bedrooms | $1,770 |
| 5 Bedrooms | $2,053 |
| 6 Bedrooms | $2,299 |
| 7 Bedrooms | $2,483 |
| 8 Bedrooms | $2,607 |
U.S. Census Bureau data (2024)
To determine if you should buy in ZIP code 46408 (Gary, IN) for Section 8 investment, follow this decision tree:
Step 1: Does the Fair Market Rent (FMR) of $1,150 cover the debt service on a property valued at $103,226?
Yes. The FMR of $1,150 can indeed support a debt service on a property valued at $103,226. Assuming a typical mortgage rate of around 5%, the annual mortgage payment would be approximately $5,900, which translates to roughly $492 per month. With an FMR of $1,150, there's sufficient margin to cover the monthly debt service and other expenses.
No. This scenario does not apply since the FMR of $1,150 is well above the estimated debt service of $492 per month.
It Depends. This scenario does not apply because the FMR clearly exceeds the expected debt service costs.
Step 2: Is the market rent ($1,321 ZORI) above, at, or below the FMR?
Above. The ZORI (Zip Level Rent Index) of $1,321 is higher than the FMR of $1,150. This indicates that market rents are above the FMR, which could mean that landlords might struggle to find tenants willing to pay the FMR, especially for properties in better condition or location.
At or Below. This scenario does not apply since the ZORI is above the FMR.
Step 3: Do the 41.2% renters and N/A-day days on market indicate sufficient demand?
Yes. A 41.2% rental rate suggests a substantial portion of the population is already renting, indicating demand for rental properties. However, the lack of data on days on market (DOM) means we cannot assess how quickly properties are rented out. Given the rental rate alone, demand appears to be strong.
No. This scenario does not apply because the rental rate is high enough to suggest demand.
It Depends. While the rental rate is high, the absence of DOM data introduces uncertainty. If the DOM is short, it implies quick turnover and high demand, supporting an investment. Conversely, if DOM is long, it may indicate difficulty in finding tenants despite the high rental rate.
In conclusion, based on the provided data, buying in ZIP 46408 for Section 8 purposes is viable. The FMR comfortably covers the debt service, and the rental rate is strong. However, the lack of DOM data necessitates further investigation into the local rental market dynamics before making a final decision.
Data Sources: FMR data from HUD (2027). 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.