Location: Henry County, IN | Metro: Muncie, 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 | $870 |
| 1 Bedroom | $880 |
| 2 Bedrooms | $1,110 |
| 3 Bedrooms | $1,390 |
| 4 Bedrooms | $1,830 |
| 5 Bedrooms | $2,123 |
| 6 Bedrooms | $2,378 |
| 7 Bedrooms | $2,568 |
| 8 Bedrooms | $2,696 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $880 | $58,007 | 1.52% | A+ |
| 2BR | $1,110 | $83,268 | 1.33% | A |
| 3BR | $1,390 | $127,670 | 1.09% | B |
| 4BR | $1,830 | $153,184 | 1.19% | B |
| 5BR | $2,123 | $200,835 | 1.06% | B |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 47302 in Muncie, IN, provides valuable insights into the investment potential for landlords and small-portfolio investors. The Fair Market Rent (FMR) for a two-bedroom apartment in FY 2024 is set at $920 per month, while the market rent, as indicated by ZORI (Zillow Observed Rent Index), stands at $957 monthly. With a median home value of $101,378, these figures can be annualized to derive the gross yield.
Annualizing the FMR of $920 yields an annual income of $11,040. Dividing this by the median home value of $101,378 gives a gross yield of approximately 10.9%. On the other hand, using the market rent of $957 results in an annual income of $11,484, leading to a gross yield of about 11.3% when divided by the median home value.
To determine which scenario is more realistic, consider the local rental market dynamics. ZIP 47302 has a renter density of 35.2%, indicating a moderate demand for rentals. Additionally, the Days on Market (DOM) is 32 days, suggesting that properties are rented relatively quickly, which supports the possibility of achieving market rents. However, the Section 8 program typically pays the lower of the actual rent or the FMR, making the $920 figure more likely to be realized consistently over time.
In conclusion, while the market rent suggests a slightly higher gross yield of 11.3%, the more conservative and reliable FMR-based gross yield of 10.9% should be considered for Section 8 investments in ZIP 47302. This is due to the nature of the Section 8 program and the fact that it often caps payments at the FMR level. Therefore, for a stable and predictable cash flow, relying on the FMR of $920 per month is advisable.
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.