Location: South Bend-Mishawaka, IN | Metro: South Bend-Mishawaka, 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 | $810 |
| 1 Bedroom | $1,000 |
| 2 Bedrooms | $1,170 |
| 3 Bedrooms | $1,420 |
| 4 Bedrooms | $1,540 |
| 5 Bedrooms | $1,786 |
| 6 Bedrooms | $2,000 |
| 7 Bedrooms | $2,160 |
| 8 Bedrooms | $2,268 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,000 | $99,436 | 1.01% | B |
| 2BR | $1,170 | $170,322 | 0.69% | D |
| 3BR | $1,420 | $238,430 | 0.6% | F |
| 4BR | $1,540 | $333,347 | 0.46% | F |
| 5BR | $1,786 | $450,709 | 0.4% | F |
U.S. Census Bureau data (2024)
The median income in ZIP code 46614, located in South Bend, IN, stands at $74,153. The market rate for rent, known as the Zillow Observed Rent Index (ZORI), is $1,209 per month. This places a significant burden on households, particularly when compared to the Fair Market Rent (FMR) payment standard for housing vouchers, which is set at $990 for the fiscal year 2024.
To put these numbers into perspective, consider that the median household would need to allocate approximately 16.3% of their annual income towards rent at the market rate. However, the government’s voucher system aims to ensure that no household pays more than 30% of their income toward rent, making the $990 FMR a more affordable option for eligible tenants.
The takeaway for landlords considering whether to accept vouchers versus relying solely on cash-paying tenants is clear. While accepting a voucher at $990 may seem less lucrative compared to the market rate of $1,209, it can provide a steady stream of income and reduce vacancy rates. In a market where affordability is a concern, vouchers represent a reliable source of tenants who can meet the required rent payments without financial strain.
Landlords should also consider the broader implications of the affordability gap. It may necessitate a diversified strategy, including both voucher and cash-paying tenants, to balance risk and reward in the rental market. By embracing vouchers, landlords can tap into a segment of the market that might otherwise be overlooked, ensuring a more stable and diverse tenant base.
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.