Location: Fountain County, IN | Metro: Lafayette-West Lafayette, IN HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $900 |
| 1 Bedroom | $1,020 |
| 2 Bedrooms | $1,210 |
| 3 Bedrooms | $1,440 |
| 4 Bedrooms | $2,020 |
| 5 Bedrooms | $2,343 |
| 6 Bedrooms | $2,624 |
| 7 Bedrooms | $2,834 |
| 8 Bedrooms | $2,976 |
U.S. Census Bureau data (2024)
To determine if a landlord should buy in ZIP code 47992 for Section 8 investment, follow this decision tree:
Step 1: Debt Service Coverage Ratio (DSCR)
The Fair Market Rent (FMR) for ZIP 47992 in fiscal year 2024 is set at $1050. A landlord must assess whether this rental income can cover the total debt service on a property valued at $361,364. This includes mortgage payments, property taxes, insurance, and maintenance costs. If the DSCR is less than 1, meaning that the $1050 monthly rent does not fully cover the debt service, then the answer is No. The landlord would be operating at a loss.
Step 2: Market Rent Comparison
The Census American Community Survey (ACS) indicates that the average market rent in ZIP 47992 is $1,060. Compare this figure to the FMR of $1050. If the market rent is higher, then there is potential for profit beyond what Section 8 covers, leading to a Yes. If the market rent is equal to or lower than the FMR, the landlord might still consider investing but will need to ensure that the FMR sufficiently covers the debt service, leading to an It Depends.
Step 3: Rental Demand Assessment
The data shows that 10.4% of households in ZIP 47992 are renters. Additionally, the number of days on the market (DOM) before a rental unit is leased is listed as N/A, which could imply either very quick leasing or that the data is not available. Assuming the data reflects quick leasing, this suggests a steady demand for rentals. However, if the DOM is high, indicating slow leasing times, the demand might not be sufficient even with the percentage of renters. Thus, if the DOM is low and there's a steady demand, the answer is Yes. If the DOM is high, the answer shifts to No. In cases where the DOM data is truly unavailable, the assessment becomes It Depends, as the landlord would need to research further into the local rental market dynamics.
In summary, a landlord considering ZIP 47992 for a Section 8 investment should first confirm that the $1050 FMR clears the debt service on a property costing $361,364. Next, they should compare this FMR to the $1,060 market rent to gauge profitability. Lastly, they should evaluate the 10.4% renter population and the DOM to understand the demand for rentals. Each step provides a clearer path towards making an informed decision.
Data Sources: FMR data from HUD (2027). 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.