Location: Grant County, IN | Metro: Grant County, IN
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 | $860 |
| 1 Bedroom | $930 |
| 2 Bedrooms | $1,170 |
| 3 Bedrooms | $1,530 |
| 4 Bedrooms | $1,720 |
| 5 Bedrooms | $1,995 |
| 6 Bedrooms | $2,234 |
| 7 Bedrooms | $2,413 |
| 8 Bedrooms | $2,534 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,170 | $112,217 | 1.04% | B |
| 3BR | $1,530 | $167,655 | 0.91% | C |
| 4BR | $1,720 | $229,013 | 0.75% | D |
U.S. Census Bureau data (2024)
Investors considering properties in ZIP code 46938, located in Jonesboro, Indiana, often raise several key concerns that need addressing to make informed decisions. One of the primary objections is whether the Fair Market Rent (FMR) of $1,090 for the metro area in fiscal year 2026 will sufficiently cover the mortgage on an average-priced home valued at $152,647. The answer is nuanced; while the FMR does not directly correlate with mortgage payments, it can be used to estimate rental income potential. For a home priced at $152,647, assuming a typical mortgage rate of around 4%, the monthly payment could range between $700 and $800, depending on down payment and term length. Therefore, the FMR of $1,090 does provide a reasonable buffer over the expected mortgage payment, making it feasible to cover costs and generate some profit.
The second objection centers around the level of renter demand in the area, which stands at 18.9%. This percentage might seem low to some investors, but it's important to understand that rental demand is also influenced by factors such as job availability, population growth, and local economic conditions. While 18.9% may indicate a smaller pool of potential renters compared to urban areas, it still represents a significant portion of the housing market. Additionally, the stability of rental demand in Jonesboro can be assessed by looking at historical trends and future projections, though the provided data does not offer these specifics. To mitigate risk, investors should consider diversifying their portfolio and possibly targeting units that cater to specific demographics, such as students or young professionals, if nearby institutions or businesses attract them.
A final concern is whether Housing Choice Vouchers, which typically cover around 70% of market rents, will keep pace with the current market rent of $1,020. Given that the voucher amount is tied to the FMR, it's likely to increase over time to match inflation and changes in the housing market. However, the exact amount of the voucher in ZIP 46938 is not specified in the provided data. Assuming a similar percentage coverage, the voucher might currently support approximately $714 towards the rent. This leaves a gap of $306, which must be covered by the tenant. While this gap exists, it's crucial to note that the remaining rent is still below the FMR, suggesting that the majority of tenants could afford the difference. Moreover, the stability of voucher funding is critical and should be monitored closely, as any reduction in federal subsidies could affect the ability of tenants to cover the remaining rent.
To summarize, the FMR of $1,090 provides a comfortable cushion over the anticipated mortgage payments for homes priced at $152,647. The rental demand at 18.9% is sufficient but requires careful consideration of the local market dynamics. Lastly, while vouchers do not fully cover the market rent of $1,020, they significantly reduce the financial burden on tenants, making the area viable for investment. These points should be weighed against the broader economic context and individual property characteristics.
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.