Section 8 Fair Market Rent (FMR) for ZIP 46514 - 2027

Investment Score for ZIP 46514

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	$1,060
1 Bedroom	$1,100
2 Bedrooms	$1,320
3 Bedrooms	$1,740
4 Bedrooms	$1,850
5 Bedrooms	$2,146
6 Bedrooms	$2,404
7 Bedrooms	$2,596
8 Bedrooms	$2,726

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
1BR	$1,100	$130,584	0.84%	C
2BR	$1,320	$180,089	0.73%	D
3BR	$1,740	$253,304	0.69%	D
4BR	$1,850	$321,600	0.58%	F
5BR	$2,146	$393,856	0.54%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 46514 (Elkhart, IN) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 46514 is set by HUD for 2026, with the following figures: - 0BR: $1010 - 1BR: $1040 - 2BR: $1240 (which is 22.6% of the median household income) - 3BR: $1630 - 4BR: $1660 To understand how these FMRs compare to actual rents, we need to consider the typical rent levels in the area. The FMR for a 2BR unit is $1240, which is significantly lower than the Zillow median price for a 2BR home, which stands at $172,696. This suggests that the FMR is designed to cover rental costs rather than purchase prices, and it is likely that actual rental prices are higher than the FMR. For voucher holders, the constraints are clear. They can only afford units up to the FMR level, meaning that a 2BR unit would be capped at $1240 per month. This is a tight budget, especially considering that the average rent for a 2BR unit might exceed this amount. As such, voucher holders are limited in their housing options and must find units that fit within the FMR guidelines. #### Affordability & Renter Profile ZIP code 46514 has a population of 42,389, with 28.0% of residents being renters. The median household income is $65,833, indicating that the area is moderately priced. However, the affordability of housing for renters is a significant concern. The FMR for a 2BR unit is $1240, which represents 22.6% of the median household income. This means that renters who rely on their income alone would have to allocate nearly one-quarter of their earnings towards rent, which is a substantial portion. Given the occupancy rate of 90.5%, it appears that the market is relatively tight. There is a high demand for housing, and with a significant percentage of the population renting, there is likely a competitive environment for rental properties. This could lead to higher rents, making it even more challenging for voucher holders to find affordable units. #### Investor Angle From an investor perspective, the key question is whether the ZIP code can generate positive cash flow at the FMR levels. The FMR for a 2BR unit is $1240, while the Zillow median price for a 2BR home is $172,696. This translates to a price-to-FMR ratio of 11.6x, which is quite high. For an investor to achieve positive cash flow, they would need to ensure that the rental income covers all expenses, including mortgage payments, maintenance, property taxes, and insurance. Given the high price-to-FMR ratio, it is unlikely that an investor purchasing a 2BR home at the Zillow median price would achieve positive cash flow solely based on the FMR. The monthly rental income would need to be substantially higher than $1240 to cover the mortgage payment, which would be around $780 assuming a 4% interest rate and a 30-year fixed mortgage. This leaves little room for other expenses, suggesting that the investment grade for this ZIP code is low for Section 8-focused investors. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the constraints of the FMR, investors should focus on smaller units, such as 0BR or 1BR apartments, where the FMR is lower ($1010 and $1040 respectively). These units are more likely to generate positive cash flow due to the lower rent ceiling required by Section 8 vouchers. 2. **Consider Lower Priced Properties**: Investors should look for properties below the Zillow median price to improve the likelihood of achieving positive cash flow. For example, a 2BR home priced at $140,000 would have a monthly mortgage payment of approximately $650, leaving more room for other expenses and still allowing for a reasonable profit margin. 3. **Target Affordable Neighborhoods**: Within ZIP code 46514, there may be neighborhoods with lower property values. Identifying these areas and focusing investments there could help mitigate the high price-to-FMR ratio and improve the chances of positive cash flow. #### Bottom Line Based on the analysis, the recommendation for Section 8-focused investors in ZIP code 46514 is to **Skip** this market. The high price-to-FMR ratio makes it difficult to achieve positive cash flow, and the tight rental market means that finding properties that meet the FMR requirements will be challenging. Investors should consider other ZIP codes with more favorable price-to-FMR ratios and less competitive rental markets.

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.