Section 8 Fair Market Rent (FMR) for ZIP 40357 - 2027

Location: Lexington-Fayette, KY | Metro: Lexington-Fayette, KY MSA

FY 2027 Fair Market Rent Rates

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

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

Population

Median Household Income

$11,750

Housing Units

Renter Percentage

82.9%

Occupancy Rate

100.0%

Renter Occupied

To decide whether you should buy in ZIP code 40357 for Section 8 purposes, follow this decision tree:

Does the Fair Market Rent (FMR) of $960 cover the debt service on a property?
- If yes: Proceed to the next question.
- If no: This is a deal-breaker. Do not invest in this area for Section 8.
Is the market rent of $834 above, at, or below the FMR?
- If above: The market conditions are favorable, but ensure that tenants can afford the higher rent.
- If at: The market rent aligns perfectly with the FMR, which is ideal for maintaining steady occupancy rates.
- If below: There may be challenges in renting out properties at the FMR rate. Consider the potential for vacancy and reduced income.
Are 82.9% of residents renters and is the days on market (DOM) sufficient to meet demand?
- If yes: There is strong rental demand. However, the exact number of days on market is missing, so evaluate if the local market allows quick property turnovers.
- If no: Insufficient demand could lead to prolonged vacancies, affecting your investment's profitability.

The Fair Market Rent (FMR) for ZIP 40357 in fiscal year 2024 is set at $960. This figure must exceed the total cost of servicing any mortgage or loans on the property to ensure profitability. With 82.9% of the population being renters, there is significant demand, but the exact days on market (DOM) is required to fully assess the speed at which properties can be rented out.

The market rent in this area, according to the Census ACS, stands at $834, which is below the FMR. This indicates that while there is strong demand, landlords might struggle to find tenants willing to pay the FMR, potentially leading to lower occupancy rates and reduced income.

In summary, investing in ZIP 40357 for Section 8 properties is viable if the FMR can cover debt service and the market allows for quick property turnovers. However, given the market rent is below the FMR, it will depend on how effectively you can manage the property to attract tenants willing to pay the higher rent.

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.