Location: Terre Haute, IN | Metro: Terre Haute, 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 | $930 |
| 1 Bedroom | $930 |
| 2 Bedrooms | $1,210 |
| 3 Bedrooms | $1,440 |
| 4 Bedrooms | $1,670 |
| 5 Bedrooms | $1,937 |
| 6 Bedrooms | $2,169 |
| 7 Bedrooms | $2,343 |
| 8 Bedrooms | $2,460 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,210 | $99,165 | 1.22% | A |
| 3BR | $1,440 | $136,300 | 1.06% | B |
U.S. Census Bureau data (2024)
A skeptical investor might raise several concerns about investing in ZIP 47928 (Cayuga, IN), particularly regarding the feasibility of covering mortgage payments, the adequacy of renter demand, and the sustainability of voucher programs relative to market rents.
Will FMR $1030 (zip FY 2024) cover the mortgage on a $127,551 home?
The Fair Market Rent (FMR) for ZIP 47928 in fiscal year 2024 is set at $1030. To determine if this amount sufficiently covers the mortgage on a home priced at $127,551, we must consider the prevailing interest rates and typical mortgage terms. Assuming a standard 30-year fixed-rate mortgage with an interest rate of 5%, the monthly payment on such a home would be approximately $650. This figure is well below the $1030 FMR, indicating that the rent could indeed cover the mortgage comfortably, with additional funds left over for maintenance and other expenses.
Is there enough renter demand at 13.4%?
The rental demand in ZIP 47928 stands at 13.4%. While this percentage is relatively low compared to more densely populated areas, it still represents a significant portion of the total housing market. The low demand could be attributed to the area's smaller population and less diverse economy. However, given the affordability of the area, it is likely that there will be sufficient demand to fill vacancies. Additionally, the stability of the local economy and the presence of key industries could provide a steady stream of potential renters.
Will vouchers keep pace with $926 market rents?
The market rent in ZIP 47928 is currently at $926, slightly below the FMR. Vouchers, which typically adjust annually based on federal guidelines, are designed to keep pace with changes in market rents. Given the historical trend of voucher increases, it is reasonable to expect that the voucher amounts will continue to align with the market rents. However, future adjustments depend on federal funding and policy changes, which cannot be predicted with certainty. Therefore, while current data suggests that vouchers will remain viable, caution is advised due to the potential for unforeseen changes in federal funding.
In summary, while there are valid concerns about the investment climate in ZIP 47928, the data indicates that the FMR can cover mortgage payments, and the rental market, although modest, should support occupancy. The voucher system's alignment with market rents provides a reliable source of income for landlords, though vigilance is necessary to monitor any changes in federal funding.
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.