Location: Montgomery County, KY | Metro: Lexington-Fayette, KY MSA
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 | $800 |
| 1 Bedroom | $980 |
| 2 Bedrooms | $1,150 |
| 3 Bedrooms | $1,570 |
| 4 Bedrooms | $1,750 |
| 5 Bedrooms | $2,030 |
| 6 Bedrooms | $2,274 |
| 7 Bedrooms | $2,456 |
| 8 Bedrooms | $2,579 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,150 | $163,808 | 0.7% | D |
| 3BR | $1,570 | $231,180 | 0.68% | D |
| 4BR | $1,750 | $319,701 | 0.55% | F |
| 5BR | $2,030 | $433,796 | 0.47% | F |
U.S. Census Bureau data (2024)
ZIP 40353, located in Mount Sterling, KY, within Montgomery County's metro area, serves as a strong cash-flow anchor for a Section 8 portfolio strategy. The key factor supporting this classification is the favorable spread between the Fair Market Rent (FMR) and the market rent. For fiscal year 2024, the FMR for ZIP 40353 is set at $970, whereas the market rent stands at $1,102. This means that landlords can expect a higher rental income from market tenants compared to what they would receive through Section 8 vouchers.
The median home value in ZIP 40353 is $231,195, indicating a modest property investment cost relative to other areas. Given the FMR and market rent figures, landlords can secure a steady cash flow by renting to both market-rate and Section 8 tenants. The lower FMR allows landlords to participate in the Section 8 program without significant financial strain, while the higher market rent provides an additional revenue stream.
To further solidify its role as a cash-flow anchor, ZIP 40353 exhibits a low price-cut share of 0.2%, suggesting that properties here are less likely to be discounted, thus preserving the landlord's income. Additionally, the Days on Market (DOM) is 88 days, which is relatively short, indicating that properties are sold quickly, reducing holding costs and vacancy periods.
The 33.4% renter share and median income of $57,329 also support the cash-flow anchor classification. While the renter share is moderate, it ensures a stable demand for rental properties. The median income figure indicates that there is enough economic stability in the area to support both Section 8 participants and market-rate renters, making it easier for landlords to find reliable tenants.
In conclusion, ZIP 40353 is best categorized as a cash-flow anchor within a Section 8 portfolio strategy due to the positive spread between FMR and market rent, low price-cut share, quick sales, and moderate but stable renter share and median income. These factors collectively contribute to a robust and predictable cash flow for landlords and small-portfolio investors.
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.