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 | $840 |
| 1 Bedroom | $850 |
| 2 Bedrooms | $1,070 |
| 3 Bedrooms | $1,340 |
| 4 Bedrooms | $1,760 |
| 5 Bedrooms | $2,042 |
| 6 Bedrooms | $2,287 |
| 7 Bedrooms | $2,470 |
| 8 Bedrooms | $2,594 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,070 | $160,297 | 0.67% | D |
| 3BR | $1,340 | $238,137 | 0.56% | F |
| 4BR | $1,760 | $281,526 | 0.63% | D |
U.S. Census Bureau data (2024)
A skeptical investor looking into ZIP 47334 in Indiana might have several concerns regarding the feasibility of investing in the area through the lens of Section 8 housing. Here are some key objections and the corresponding data to address them.
Objection 1: Will Fair Market Rent (FMR) of $920 for ZIP 47334 in fiscal year 2024 cover the mortgage on a $226,461 home?
The FMR of $920 does not guarantee coverage of the mortgage on a $226,461 home. According to recent data, the average mortgage payment for a home of this value can range widely depending on interest rates and loan terms. For instance, with a 30-year fixed-rate mortgage at an average rate of 5%, the monthly principal and interest payment would be approximately $1,200. This amount exceeds the $920 FMR, indicating that additional income sources or lower mortgage rates would be necessary to ensure profitability.
Objection 2: Is there enough renter demand at 19.3%?
The rental demand in ZIP 47334, measured by the percentage of renters at 19.3%, may seem low compared to national averages. However, this figure must be contextualized within the local real estate market. A lower percentage of renters could indicate higher homeownership rates, which is positive for overall community stability. Nevertheless, it also implies a smaller pool of potential Section 8 tenants. To assess demand, one must consider the number of households eligible for Section 8 assistance in the area. The data provided does not specify this number, but it is crucial for understanding if the 19.3% represents a sufficient tenant base.
Objection 3: Will vouchers keep pace with $813 market rents?
The current market rent of $813 is slightly below the FMR of $920, suggesting that the voucher amounts may be adequate to cover the typical rent in the area. However, the sustainability of this trend depends on how well the U.S. Department of Housing and Urban Development (HUD) adjusts voucher amounts to match inflation and market conditions. If HUD fails to adjust the voucher levels accordingly, landlords might face difficulties in covering their expenses. It's important to monitor HUD's adjustments closely, especially considering the projected FMR increase to $920 in 2024.
In conclusion, while ZIP 47334 presents opportunities for Section 8 investments, it also poses challenges related to mortgage coverage, rental demand, and voucher adequacy. Careful consideration of these factors is essential for making informed investment decisions.
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.