Section 8 Fair Market Rent (FMR) for ZIP 47905 - 2027

Investment Score for ZIP 47905

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	$980
1 Bedroom	$1,110
2 Bedrooms	$1,320
3 Bedrooms	$1,570
4 Bedrooms	$2,210
5 Bedrooms	$2,564
6 Bedrooms	$2,872
7 Bedrooms	$3,102
8 Bedrooms	$3,257

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
2BR	$1,320	$203,055	0.65%	D
3BR	$1,570	$287,793	0.55%	F
4BR	$2,210	$383,487	0.58%	F
5BR	$2,564	$569,913	0.45%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 47905 (Lafayette, IN) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 47905, as per the 2026 figures, is set at $1270 for a two-bedroom unit. This amount represents 23.1% of the median household income in the area, which stands at $65,861. However, the actual rental market in Lafayette appears to be significantly higher than the FMR. For instance, the Zillow median price for a two-bedroom property is $194,954, which translates to a monthly rent of approximately $1270 based on typical mortgage payments. The price-to-FMR ratio of 12.8x suggests that the market rents are substantially above the FMR, making it challenging for Section 8 voucher holders to find affordable housing. Given the high price-to-FMR ratio, landlords who accept Section 8 vouchers are likely to face financial constraints. They may struggle to cover their costs if they rely solely on the voucher payment, especially considering the need to maintain properties and cover unexpected expenses. This dynamic could lead to fewer landlords willing to participate in the Section 8 program, potentially exacerbating the housing affordability issue for low-income renters. #### Affordability & Renter Profile ZIP code 47905 has a population of 42,219, with 38.6% of residents being renters. The occupancy rate is quite high at 95.4%, indicating a tight rental market where demand is strong relative to supply. Given the median household income of $65,861, the FMR for a two-bedroom unit at $1270 is a significant portion of the average renter’s budget. The high percentage of renters and the tight market suggest that there is a substantial need for affordable housing options. However, the current market dynamics, with rents far exceeding the FMR, indicate that many renters may be paying more than they can comfortably afford. This situation could lead to increased financial stress among the renter population, particularly those relying on Section 8 vouchers. #### Investor Angle From an investor perspective, the ZIP code 47905 presents a mixed picture. While the median household income is relatively moderate, the high price-to-FMR ratio suggests that properties rented at FMR levels might not generate sufficient cash flow to cover all operational costs. To illustrate, let's consider a two-bedroom unit. At the FMR of $1270, the investor would receive this amount as the maximum allowable rent under the Section 8 program. However, given the actual market rent of around $1270 (based on the Zillow median price), the investor would need to ensure that the property is well-maintained and located in a desirable area to attract tenants. Moreover, the high price-to-FMR ratio implies that the investor might need to consider additional sources of revenue or subsidies to make the investment financially viable. In terms of investment grade, the ZIP code 47905 would likely be rated as medium to low due to the challenges in achieving positive cash flow at FMR rates. #### Specific Actionable Insights 1. **Focus on Properties Below FMR**: Investors should seek out properties that can be rented below the FMR but still meet the quality standards required by the Section 8 program. For example, a two-bedroom unit priced at $1100 would be more attractive to voucher holders and could provide a better chance of maintaining occupancy. 2. **Consider Mixed-Income Developments**: Developing properties that cater to both Section 8 voucher holders and market-rate renters could help balance the financial risks. By having a mix of units rented at different rates, investors can ensure a steady stream of income while contributing to the community's affordable housing needs. 3. **Engage with Local Housing Authorities**: Building relationships with local housing authorities can provide insights into the availability of vouchers and potential subsidies. This can help investors navigate the complexities of the Section 8 program and secure long-term tenancy. #### Bottom Line For Section 8-focused investors, the ZIP code 47905 presents a challenging environment due to the high price-to-FMR ratio and the tight rental market. The recommendation would be to **Hold** existing investments in this area but **Skip** new acquisitions unless they can be priced below the FMR or have a strategic plan to incorporate mixed-income developments. The current market conditions make it difficult to achieve positive cash flow strictly through Section 8 vouchers, necessitating a more nuanced approach to investment.

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.