Section 8 Fair Market Rent (FMR) for ZIP 47401 - 2027

Investment Score for ZIP 47401

Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)

FY 2027 Fair Market Rent Rates

Unit Size	Monthly FMR
Studio	$1,030
1 Bedroom	$1,130
2 Bedrooms	$1,290
3 Bedrooms	$1,650
4 Bedrooms	$1,990
5 Bedrooms	$2,308
6 Bedrooms	$2,585
7 Bedrooms	$2,792
8 Bedrooms	$2,932

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
1BR	$1,130	$156,433	0.72%	D
2BR	$1,290	$226,984	0.57%	F
3BR	$1,650	$355,016	0.46%	F
4BR	$1,990	$510,408	0.39%	F
5BR	$2,308	$638,616	0.36%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 47401 (Bloomington, IN) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) figures for ZIP code 47401 in Bloomington, Indiana, indicate that the rental costs for various unit types are as follows in 2026: - 0BR: $980 - 1BR: $1090 - 2BR: $1230 - 3BR: $1600 - 4BR: $1940 These FMRs represent the maximum amount that a Section 8 voucher holder can pay towards rent. However, it is important to note that these figures do not necessarily reflect the actual rents charged in the market. For instance, the Zillow median price for a 2BR property in this ZIP code is $222,793, which translates into a Price-to-FMR ratio of 15.1x. This suggests that actual market rents are significantly higher than the FMRs, making it challenging for voucher holders to find suitable housing. The 2BR FMR represents only 22.1% of the median household income, indicating that many renters would struggle to afford even the subsidized rent levels. #### Affordability & Renter Profile ZIP code 47401 has a population of 40,607, with 46.7% of residents being renters. This high percentage of renters suggests a significant demand for rental properties. The occupancy rate of 91.4% further supports the notion that the market is relatively tight, with most available units being occupied. Given the median household income of $66,906, the majority of renters likely fall into the middle-income bracket. The high rent-to-income ratio for the 2BR units (15.1x) implies that the market is not particularly affordable for low-income households, who might rely heavily on Section 8 vouchers. #### Investor Angle From an investor perspective, the ZIP code 47401 presents a mixed picture. While the occupancy rates suggest strong demand, the high market rents compared to FMRs could pose challenges for cash flow. To determine if this ZIP code is cash-flow positive at FMR, we need to consider the typical expenses associated with owning and managing rental properties. Assuming a conservative estimate of 50% of the FMR for operating expenses, the net rent for a 2BR unit would be approximately $615 ($1230 - 50% of $1230). This amount needs to cover mortgage payments, maintenance, insurance, and other costs. If the average purchase price of a 2BR unit is around $222,793, then the monthly mortgage payment (assuming a 30-year fixed-rate mortgage at 4%) would be about $1060. This leaves a shortfall of nearly $445 per month, indicating that investments at FMR levels may not be cash-flow positive without additional subsidies or cost savings. The investment grade for this ZIP code would be considered moderate to low due to the high market rents and the potential for negative cash flow. Investors should carefully assess their ability to manage properties at lower rent levels and ensure they have a solid understanding of the local rental market dynamics. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high market rents for larger units, investors might find better opportunities by focusing on smaller units such as 0BR or 1BR apartments. These units typically have lower FMRs but may still command reasonable market rents. For example, a 1BR unit with an FMR of $1090 could potentially be rented out at a higher rate, improving cash flow. 2. **Consider Subsidies**: Investors should explore additional subsidies beyond just Section 8 vouchers. Programs like Low-Income Housing Tax Credits (LIHTC) or state-specific rental assistance programs could help bridge the gap between FMR and market rents, making investments more financially viable. 3. **Target Affordable Neighborhoods**: Within ZIP code 47401, there may be pockets where market rents are closer to FMRs. Identifying and targeting these neighborhoods could improve the chances of finding cash-flow positive investments. Additionally, areas with a higher concentration of low-income households may offer better opportunities for Section 8 tenants. #### Bottom Line For Section 8-focused investors, the ZIP code 47401 presents a challenging environment due to the high market rents relative to FMRs. The recommendation would be to **Skip** investing in this ZIP code unless you can secure additional subsidies or identify specific areas where market rents are more aligned with FMRs. The current dynamics suggest that cash flow will likely be negative without significant cost reductions or supplementary funding sources.

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.