Location: Kosciusko County, IN | Metro: Elkhart-Goshen, IN MSA
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 | $910 |
| 1 Bedroom | $920 |
| 2 Bedrooms | $1,200 |
| 3 Bedrooms | $1,460 |
| 4 Bedrooms | $1,580 |
| 5 Bedrooms | $1,833 |
| 6 Bedrooms | $2,053 |
| 7 Bedrooms | $2,217 |
| 8 Bedrooms | $2,328 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,200 | $224,301 | 0.53% | F |
| 3BR | $1,460 | $278,724 | 0.52% | F |
| 4BR | $1,580 | $345,239 | 0.46% | F |
U.S. Census Bureau data (2024)
Skeptical investors considering real estate investments in ZIP code 46542 (Milford, IN) often raise several key concerns that need addressing with data.
Objection 1: Will the Fair Market Rent (FMR) of $960 cover the mortgage on a $274,048 home?
The FMR of $960 for ZIP 46542 is indeed a critical figure when assessing the viability of rental income. To determine if it can cover the mortgage, we must consider the typical interest rates and loan terms. Assuming a 30-year fixed-rate mortgage with an average interest rate of around 5%, the monthly mortgage payment for a $274,048 home would be approximately $1,480. This means that the FMR of $960 falls short by about $520 per month. However, this calculation does not account for potential appreciation in property value over time, nor does it factor in other sources of income such as tenants paying utilities or additional fees. Moreover, the FMR is set to ensure affordability, which means actual market rents could be higher.
Objection 2: Is there enough renter demand at 18.1%?
The percentage of renter-occupied housing units at 18.1% might initially seem low, suggesting limited demand. However, this metric alone does not tell the whole story. It's important to look at the broader context, including population growth and job market trends. For instance, Milford has seen steady employment growth in recent years, particularly in healthcare and retail sectors, which can support a growing rental market. Additionally, the presence of nearby universities and colleges can drive seasonal rental demand. While the data suggests a lower-than-average rental occupancy rate, these factors indicate a potentially robust demand that may not be reflected solely in the occupancy statistic.
Objection 3: Will vouchers keep pace with $1,092 market rents?
The current market rent of $1,092 poses a challenge for voucher holders, especially given that the FMR is set below this level. The U.S. Department of Housing and Urban Development (HUD) periodically adjusts the FMR based on market conditions. In the case of ZIP 46542, where the gap between FMR and market rent is significant, it's likely that HUD will increase the FMR in future adjustments to better reflect the local rental market. Landlords should monitor these changes closely and engage with local housing authorities to stay informed about any adjustments to voucher amounts.
In conclusion, while the data presents some challenges, particularly with covering mortgage payments and the relatively low percentage of renter-occupied units, there are underlying economic factors and potential for FMR adjustments that can mitigate these concerns. Investors should conduct thorough due diligence, including evaluating property-specific expenses and potential for increased rental income beyond the FMR.
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.