Location: Terre Haute, IN | Metro: Owen 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 | $780 |
| 1 Bedroom | $780 |
| 2 Bedrooms | $1,010 |
| 3 Bedrooms | $1,210 |
| 4 Bedrooms | $1,410 |
| 5 Bedrooms | $1,636 |
| 6 Bedrooms | $1,832 |
| 7 Bedrooms | $1,979 |
| 8 Bedrooms | $2,078 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,010 | $128,488 | 0.79% | D |
| 3BR | $1,210 | $202,994 | 0.6% | F |
U.S. Census Bureau data (2024)
Clay City, IN, located in ZIP code 47841, is a small community with a total population of 2,534. The area is predominantly owner-occupied, with only 21.5% of residents being renters. This suggests a primarily stable, long-term resident base, but also indicates a limited rental market. The median household income in this ZIP code is $71,346, which places it above the national average, suggesting that residents have a reasonable disposable income. The median home value stands at $173,866, indicating that housing in the area is relatively affordable.
Moving into the economic realities of renting, the Fair Market Rent (FMR) for ZIP code 47841, as set by HUD for fiscal year 2024, is $860. In contrast, the Census ACS data shows that the average market rent in the area is $756. This difference highlights an opportunity for landlords who can offer properties that meet the criteria for Section 8 vouchers, potentially commanding higher rents through government subsidies.
The question of whether this area suits a hands-off voucher operator or a hands-on value-add buyer hinges on the local dynamics. Given the relatively low percentage of renters and the modest gap between FMR and market rent, a hands-off approach might be less profitable. However, a hands-on strategy, focusing on improving property values and efficiency, could yield better returns. For instance, enhancing the quality of rental units to align with HUD standards could position them to capture the higher FMR rate, thus increasing profitability beyond the typical market rent.
In conclusion, while ZIP code 47841 offers opportunities for Section 8 investment due to its favorable FMR compared to market rent, the limited rental market suggests a need for active management and strategic improvements to maximize returns. Landlords and investors should consider the potential for value addition when evaluating properties in this area.
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.