Section 8 Fair Market Rent (FMR) for ZIP 40324 - 2027

Investment Score for ZIP 40324

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	$1,020
1 Bedroom	$1,250
2 Bedrooms	$1,470
3 Bedrooms	$2,020
4 Bedrooms	$2,190
5 Bedrooms	$2,540
6 Bedrooms	$2,845
7 Bedrooms	$3,073
8 Bedrooms	$3,227

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	$1,470	$224,431	0.65%	D
3BR	$2,020	$314,106	0.64%	D
4BR	$2,190	$414,669	0.53%	F
5BR	$2,540	$520,584	0.49%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 40324 (Georgetown, KY) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 40324, as determined by HUD for 2026, is set at $1310 for a two-bedroom unit. This figure represents 18.5% of the median household income of $85,110 in the area. However, the actual rental market price for a two-bedroom unit, according to Zillow, is significantly higher at $220,333. The price-to-FMR ratio of 14.0x indicates that the actual market rent far exceeds the FMR, which is a critical factor for Section 8 voucher holders. Given the disparity between the FMR and the actual market rent, voucher holders face significant constraints in finding suitable housing. For instance, a two-bedroom unit priced at $220,333 would be well beyond the FMR limit of $1310, making it unaffordable for those relying on vouchers. Consequently, landlords who wish to participate in the Section 8 program must adhere to these FMR limits, potentially limiting their ability to charge market rates. #### Affordability & Renter Profile ZIP code 40324 has a population of 53,406, with 30.6% of residents being renters. This suggests a substantial demand for rental properties in the area. The occupancy rate of 95.4% further supports the notion that the rental market is relatively tight, indicating that there is little excess capacity available for new renters. The median household income of $85,110 provides insight into the economic profile of potential renters. Given that 18.5% of this income equates to the FMR for a two-bedroom unit ($1310), it implies that renters in this ZIP code generally have the financial means to afford higher rents. However, the 30.6% renter percentage also indicates that a considerable portion of the population relies on rental housing, which can create competition among renters for affordable units. #### Investor Angle From an investor perspective, the ZIP code 40324 presents a mixed picture. While the actual market rents are high, the FMRs set by HUD are much lower. To determine if this ZIP code is cash-flow positive at FMR, we need to consider the typical expenses associated with owning and renting out a property. Assuming a conservative estimate of expenses including mortgage payments, property taxes, insurance, maintenance, and other costs, let's say these total around $1000 per month for a two-bedroom unit. At the FMR of $1310, the net cash flow would be approximately $310 per month, which is positive but modest. This suggests that while it is possible to make money at FMR, the margins are thin compared to charging market rates. The investment grade of a property in this ZIP code would depend on several factors, including the location within Georgetown, the condition of the property, and the overall demand for rental units. Given the tight occupancy rate and the high proportion of renters, properties that are well-maintained and located in desirable areas could still attract tenants despite the lower FMR rates. #### Specific Actionable Insights 1. **Focus on Well-Maintained Properties**: Investors should prioritize purchasing properties that are in good condition and located in desirable areas. This will help ensure that the property remains attractive to tenants even when operating under the FMR constraints. For example, a two-bedroom unit in prime condition could command a slightly higher rent within the FMR range, such as $1350-$1400. 2. **Consider Multi-Family Units**: Given the higher FMRs for larger units (e.g., three-bedroom units at $1800 and four-bedroom units at $2000), investors might find better cash flow opportunities by focusing on multi-family units. These units can cater to families with children, who often require larger living spaces and are willing to pay more within the FMR guidelines. 3. **Engage with Local Real Estate Agents**: Working closely with local real estate agents can provide valuable insights into the specific dynamics of the Georgetown rental market. Agents can help identify areas where the competition for rental units is less intense, allowing investors to potentially negotiate better terms with tenants. #### Bottom Line For Section 8-focused investors, the ZIP code 40324 (Georgetown, KY) presents a challenging yet potentially rewarding opportunity. The high price-to-FMR ratio means that voucher holders will struggle to find suitable housing, but the tight rental market and high occupancy rate suggest strong demand for rental units. Investors should focus on well-maintained properties in desirable locations and consider multi-family units to maximize cash flow. However, due to the thin margins at FMR and the significant gap between FMR and market rents, the recommendation is to **Hold** rather than actively seek new investments unless you can secure properties at a price point that allows for reasonable returns within the FMR limits.

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.