Location: Wayne County, IN | Metro: Franklin County, 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 | $720 |
| 1 Bedroom | $840 |
| 2 Bedrooms | $1,010 |
| 3 Bedrooms | $1,330 |
| 4 Bedrooms | $1,360 |
| 5 Bedrooms | $1,578 |
| 6 Bedrooms | $1,767 |
| 7 Bedrooms | $1,908 |
| 8 Bedrooms | $2,003 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $840 | $79,165 | 1.06% | B |
| 2BR | $1,010 | $107,248 | 0.94% | C |
| 3BR | $1,330 | $184,183 | 0.72% | D |
| 4BR | $1,360 | $225,694 | 0.6% | D |
| 5BR | $1,578 | $254,428 | 0.62% | D |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP 47331, Connersville, IN, reveals two distinct scenarios based on the Fair Market Rent (FMR) and market rent figures for a 2BR unit. Using the annualized FMR of $860 per month, the potential annual rental income for a 2BR unit would be $10,320. Against the median home value of $159,197, this translates into an implied gross yield of approximately 6.5%. This calculation is straightforward: divide the annual rental income by the property value.
Contrastingly, using the Census ACS-reported market rent of $789 per month, the annual rental income drops to $9,468. The implied gross yield under this scenario is roughly 5.9%, significantly lower than the FMR-based yield. These figures provide a clear picture of the potential income streams when considering Section 8 participation versus market renting in Connersville.
The reality of which yield is more attainable hinges on several factors, including the local rental market dynamics. With a 28.3% renter density, it's evident that a considerable portion of the population relies on rental housing, which could support higher rents through Section 8. However, the Days on Market (DOM) figure of 54 days suggests that homes are selling relatively quickly, indicating a robust demand for owner-occupied properties. This quick turnover might limit the attractiveness of long-term rental investments, particularly those tied to government programs with strict regulations.
Given these metrics, the 6.5% gross yield derived from the FMR seems more optimistic. It aligns better with the high renter dependency and the fact that Section 8 provides stable, guaranteed income. On the other hand, the 5.9% gross yield from the market rent reflects a more conservative outlook, suitable for a scenario where landlords are concerned about the balance between rental income and the potential for quicker sales or owner-occupation.
In conclusion, while the FMR-based gross yield of 6.5% is appealing, the actual achievable yield may fall closer to the market rent-based 5.9%, especially if landlords are considering the broader context of the local real estate market and the practicalities of managing a rental property in Connersville.
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.