Section 8 Fair Market Rent (FMR) for ZIP 47909 - 2027

Investment Score for ZIP 47909

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	$950
1 Bedroom	$1,080
2 Bedrooms	$1,290
3 Bedrooms	$1,540
4 Bedrooms	$2,160
5 Bedrooms	$2,506
6 Bedrooms	$2,807
7 Bedrooms	$3,032
8 Bedrooms	$3,184

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
2BR	$1,290	$223,402	0.58%	F
3BR	$1,540	$270,840	0.57%	F
4BR	$2,160	$363,449	0.59%	F
5BR	$2,506	$494,660	0.51%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 47909 (Lafayette, IN) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 47909 is set by HUD for 2026, with the following rates: - 0BR: $910 - 1BR: $1060 - 2BR: $1270 - 3BR: $1520 - 4BR: $2040 Comparing these figures to actual rents, we see that the Zillow median price for a 2BR unit is $215,369. However, the FMR for a 2BR unit is only $1270 per month, which is significantly lower than what landlords might charge. The price-to-FMR ratio for a 2BR unit is 14.1x, indicating that the median home value is much higher than the monthly rental cost. This suggests that landlords who accept Section 8 vouchers will be limited in their ability to charge higher rents due to the FMR caps. For voucher holders, the primary constraint is the maximum rent they can afford based on the FMR. For example, a household with a 2BR voucher would have a maximum allowable rent of $1270 per month, which is only about 22.4% of the median household income of $68,035. This means that voucher holders must find units priced at or below this level, which could be challenging given the high median home values in the area. #### Affordability & Renter Profile ZIP code 47909 has a population of 43,561, with 34.0% of residents being renters. This indicates a significant portion of the population relies on rental housing. The occupancy rate of 96.6% suggests that the rental market is quite tight, with very few vacant units available. Given that 2BR units have an FMR of $1270, which is only 22.4% of the median household income, it is clear that many renters in this area are likely to be low-income households. These individuals may struggle to find affordable housing options, especially since the median home value for a 2BR unit is $215,369, far exceeding the typical budget of low-income renters. The tight market conditions mean that landlords who accept Section 8 vouchers may still face competition from other tenants willing to pay higher rents. However, the high occupancy rate also suggests that there is strong demand for rental properties, even those at or near the FMR. #### Investor Angle From an investor perspective, the key question is whether accepting Section 8 vouchers would result in positive cash flow. Given the FMRs and the median home values, the potential for cash flow is mixed. For instance, a 2BR unit with a median home value of $215,369 would generate approximately $18,000 in annual rental income if rented at the FMR of $1270 per month. However, the mortgage payment, property taxes, insurance, maintenance, and other costs associated with owning a home valued at $215,369 could easily exceed this amount. Therefore, landlords who accept Section 8 vouchers for 2BR units may not achieve positive cash flow unless they can manage costs effectively or the property is already paid off. The investment grade for this ZIP code would be considered moderate. While there is strong demand for rental properties, the tight market and high median home values make it challenging to achieve positive cash flow solely through Section 8 vouchers. Investors should carefully consider the financial implications before committing to this market. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors should focus on smaller units such as 0BR or 1BR apartments. For example, a 1BR unit with an FMR of $1060 per month would generate $12,720 annually, which might be more manageable in terms of cash flow compared to larger units. 2. **Consider Location and Amenities**: In a tight market like ZIP 47909, location and amenities can play a crucial role in attracting tenants. Properties located close to universities, major employers, or public transportation may command slightly higher rents while still remaining within FMR limits. 3. **Explore Alternative Funding Sources**: Given the high median home values, investors might need to explore alternative funding sources to reduce the overall cost burden. This could include grants, tax credits, or partnerships with local organizations that support affordable housing initiatives. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 47909 is to **Hold**. While there is strong demand for rental properties, the high median home values and tight market conditions make it difficult to achieve positive cash flow without careful management of costs. Investors should focus on smaller units and consider strategic locations to maximize their chances of success. Additionally, exploring alternative funding sources could help mitigate some of the financial challenges associated with this market.

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.