Location: Lafayette-West Lafayette, IN | Metro: Lafayette-West Lafayette, 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 | $860 |
| 1 Bedroom | $980 |
| 2 Bedrooms | $1,160 |
| 3 Bedrooms | $1,380 |
| 4 Bedrooms | $1,940 |
| 5 Bedrooms | $2,250 |
| 6 Bedrooms | $2,520 |
| 7 Bedrooms | $2,722 |
| 8 Bedrooms | $2,858 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,160 | $252,135 | 0.46% | F |
| 3BR | $1,380 | $263,755 | 0.52% | F |
U.S. Census Bureau data (2024)
A landlord considering investing in ZIP 47901 (Lafayette, IN) for Section 8 must follow a structured decision-making process based on the financial metrics and market conditions. Here's how to approach the question:
1) Does the Fair Market Rent (FMR) of $1,010 cover the debt service on a property valued at $254,986?
To determine if the FMR clears the debt service, calculate the annual rental income and compare it to the total debt service. Assuming a typical mortgage rate of 5%, the annual debt service on a $254,986 property would be approximately $15,299.10 ($1,274.93 monthly). The annual rental income based on the FMR would be $12,120 ($1,010 monthly).
No. The FMR of $1,010 does not cover the debt service on a $254,986 property, which is $1,274.93 per month. This makes the investment unfeasible purely from a Section 8 standpoint without additional considerations such as subsidies or non-rental income.
2) Is the market rent of $1,116 (ZORI) above, at, or below the FMR?
The ZORI (Zillow Observed Rent Index) of $1,116 is higher than the FMR of $1,010. This indicates that the market rent exceeds the government-set FMR, which could allow landlords to consider both Section 8 and market-rate tenants.
Yes. The ZORI is above the FMR, suggesting that landlords can potentially earn more by renting to market-rate tenants rather than relying solely on Section 8 vouchers.
3) Are 91.9% renters combined with an unspecified number of days on the market (DOM) sufficient demand?
The high percentage of renters at 91.9% suggests strong demand for rental properties in ZIP 47901. However, the lack of data on days on the market (DOM) means we cannot fully assess the speed at which properties are rented out. Despite this gap, the high renter percentage alone points towards a robust tenant pool.
It depends. With 91.9% of residents being renters, there is significant demand for rental properties. However, the absence of DOM data prevents a complete evaluation of how quickly properties are leased. Landlords should proceed cautiously, considering both the high renter percentage and the need for further research into leasing times.
In conclusion, ZIP 47901 presents a challenging scenario for pure Section 8 investments due to the FMR not covering the debt service. However, the potential for market-rate rents above FMR and a high demand for rentals make it a viable area for landlords willing to diversify their tenant base. Additional research into specific property values and local subsidies is recommended to refine the investment strategy.
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.