Section 8 Fair Market Rent (FMR) for ZIP 40356 - 2027

Investment Score for ZIP 40356

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	$1,160
2 Bedrooms	$1,360
3 Bedrooms	$1,870
4 Bedrooms	$2,020
5 Bedrooms	$2,343
6 Bedrooms	$2,624
7 Bedrooms	$2,834
8 Bedrooms	$2,976

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
1BR	$1,160	$190,256	0.61%	D
2BR	$1,360	$187,775	0.72%	D
3BR	$1,870	$282,339	0.66%	D
4BR	$2,020	$449,703	0.45%	F
5BR	$2,343	$741,545	0.32%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 40356 (Nicholasville, KY) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 40356 in 2026 is set at $1180 for a two-bedroom unit. This amount represents 19.0% of the median household income of $74,495, indicating that it is within a reasonable range for affordability. However, the actual rental prices in the area can be significantly higher. According to Zillow, the median price for a two-bedroom home is $185,582, which translates to a monthly rent of approximately $1546 based on typical mortgage-to-rent conversion rates. This means that the actual rent for a two-bedroom unit is about 31% higher than the FMR, creating a significant gap between what voucher holders can afford and what landlords might charge. The constraints for voucher holders are clear: they must find housing that does not exceed the FMR. In Nicholasville, this could be challenging given the higher actual rental prices. For instance, a three-bedroom unit has an FMR of $1620, but if actual rents follow the same trend as two-bedroom units, they could easily exceed this amount. This situation often leads to voucher holders being limited to smaller units or less desirable properties, which can impact their quality of life and ability to secure suitable housing. #### Affordability & Renter Profile In ZIP code 40356, 32.5% of the population are renters, indicating a moderate rental market presence. The occupancy rate stands at 94.5%, suggesting that the rental market is relatively tight. Given the median household income of $74,495, the majority of residents likely have stable employment and can afford higher rents. However, the 32.5% who are renters may face challenges due to the high price-to-FMR ratio of 13.1x. This ratio implies that the median home value is more than thirteen times the FMR for a two-bedroom unit, making it difficult for low-income renters to find affordable housing without assistance. The tight market conditions mean that there is strong demand for rental properties, particularly those that are within the FMR limits. This demand can drive up prices and make it harder for voucher holders to find suitable housing. Additionally, the high price-to-FMR ratio suggests that the housing stock is generally priced above the FMR, which can limit the number of available options for Section 8 voucher holders. #### Investor Angle From an investor perspective, the ZIP code 40356 presents both opportunities and challenges. The FMR for a two-bedroom unit is $1180, which is below the actual median rent of $1546. This discrepancy creates a potential for cash flow positive investments if the investor can secure properties at or near the FMR. However, the challenge lies in finding properties that are willing to accept Section 8 vouchers at these lower rates. Given the high price-to-FMR ratio of 13.1x, it is likely that many landlords are already charging well above the FMR. Therefore, an investor would need to focus on acquiring properties that are currently underpriced or have the potential to be rented out at FMR levels. This could involve targeting older, less desirable properties or negotiating with landlords to accept vouchers at the FMR. The investment grade for this ZIP code would be considered moderate. While there is strong demand for rental properties, the high actual rental prices relative to the FMR suggest that there may be limited opportunities for investors to profit from Section 8 voucher holders. However, the tight market conditions do provide some stability and predictability in terms of occupancy and rental income. #### Specific Actionable Insights 1. **Target Lower-Priced Properties**: Investors should focus on acquiring properties that are currently priced at or near the FMR. For example, a two-bedroom unit priced at $1180 or slightly above would be ideal for attracting Section 8 voucher holders. This strategy can help ensure steady cash flow and minimize vacancy risks. 2. **Negotiate with Landlords**: If acquiring properties outright is not feasible, investors should consider negotiating with existing landlords to accept Section 8 vouchers. This could involve offering incentives such as property management services or agreeing to cover any shortfall between the FMR and the actual rent. For instance, a landlord charging $1546 for a two-bedroom unit might be persuaded to accept a voucher tenant paying $1180 by offering to manage the property and handle any maintenance issues. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 40356 is to **Hold**. While there are opportunities to acquire properties at or near the FMR, the high actual rental prices and tight market conditions make it challenging to find suitable properties. Additionally, the high price-to-FMR ratio suggests that many landlords are already charging well above the FMR, reducing the pool of available options for voucher holders. Investors should carefully evaluate the local rental market and consider strategies such as targeting lower-priced properties or negotiating with landlords to accept vouchers. However, given the limited number of properties that fall within the FMR range and the strong competition from non-voucher tenants, the overall investment potential is moderate. --- This analysis provides a comprehensive overview of the rental market dynamics in ZIP code 40356, focusing on how the Fair Market Rent compares to actual rents, the profile of renters, and the potential for investors. It highlights the challenges faced by voucher holders and offers specific insights into how investors can navigate 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.