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 | $850 |
| 1 Bedroom | $970 |
| 2 Bedrooms | $1,150 |
| 3 Bedrooms | $1,370 |
| 4 Bedrooms | $1,920 |
| 5 Bedrooms | $2,227 |
| 6 Bedrooms | $2,494 |
| 7 Bedrooms | $2,694 |
| 8 Bedrooms | $2,829 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $970 | $132,554 | 0.73% | D |
| 2BR | $1,150 | $169,239 | 0.68% | D |
| 3BR | $1,370 | $201,181 | 0.68% | D |
| 4BR | $1,920 | $242,071 | 0.79% | D |
U.S. Census Bureau data (2024)
The Section 8 thesis for ZIP code 47904 in Lafayette, IN, is centered around the discrepancy between the Fair Market Rent (FMR) and the actual market rent. For fiscal year 2024, the FMR stands at $1010, while the market rent, as measured by ZORI, is $1,002. This means that the FMR is $8 higher than the market rent, or 0.79% above it.
In this scenario, where the FMR exceeds the market rent, landlords can leverage the Section 8 program to secure steady rental income. Voucher tenants provide a predictable cash flow because their rent is subsidized by the government. This makes the investment a yield play, as landlords can expect consistent returns without the risk of vacancy or non-payment.
Lafayette, IN, has a significant population of renters, accounting for 56.8% of the total housing units. The median home value in the area is $181,901, which suggests a relatively stable housing market. However, the median income of $51,687 indicates that many residents rely on affordable housing options, making the Section 8 program particularly attractive.
The $8 gap between FMR and market rent means that landlords can charge slightly above the typical market rate, ensuring they receive a fair return on their investment. This slight premium allows landlords to cover maintenance costs and property management fees, while still providing affordable housing to low-income families.
Despite the gap being minimal, the predictability of rental income from voucher tenants can be a significant advantage. In a city where nearly half of the population rents, having a guaranteed tenant through the Section 8 program can offer peace of mind and financial stability to landlords and small-portfolio investors.
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.