Location: Lincoln County, KY | Metro: Garrard County, KY
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 | $680 |
| 1 Bedroom | $870 |
| 2 Bedrooms | $950 |
| 3 Bedrooms | $1,240 |
| 4 Bedrooms | $1,250 |
| 5 Bedrooms | $1,450 |
| 6 Bedrooms | $1,624 |
| 7 Bedrooms | $1,754 |
| 8 Bedrooms | $1,842 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $950 | $168,988 | 0.56% | F |
| 3BR | $1,240 | $261,528 | 0.47% | F |
| 4BR | $1,250 | $345,723 | 0.36% | F |
U.S. Census Bureau data (2024)
A decision tree for ZIP code 40444 (Lancaster, KY) when considering Section 8 investments involves three key questions.
1) Does FMR $900 (metro FY 2026) clear debt service on a $283,725 property?
It depends. To determine if the Fair Market Rent (FMR) of $900 can cover the debt service on a property valued at $283,725, you must first calculate the expected monthly mortgage payment. Assuming a 30-year fixed-rate mortgage at an average interest rate of 4.5%, the monthly payment would be approximately $1,420. This amount does not include property taxes, insurance, and maintenance costs, which collectively could add another $300-$500 per month. Therefore, the total debt service might exceed $900, making it challenging to clear without additional income sources or cost reductions. If your costs are lower, or you secure a better interest rate, then the answer shifts to yes.
2) Is market rent $811 (Census ACS) above, at, or below FMR?
The market rent of $811 is below the FMR of $900. This indicates that properties in ZIP 40444 are generally priced lower than what Section 8 vouchers can cover, which could be advantageous for landlords as it leaves room for profit above the voucher amount. However, it also suggests that the local rental market is less robust compared to the federal standard, which may impact overall demand.
3) Are 20.6% renters + N/A-day days on market (DOM) enough demand?
No. The 20.6% of residents who are renters represents a smaller pool of potential tenants compared to areas with higher percentages. Additionally, the absence of data on the days on market (DOM) means there's uncertainty about how quickly properties are rented out. Without knowing the DOM, it's difficult to assess the speed of turnover and the likelihood of maintaining steady occupancy rates, which are crucial for cash flow stability in a Section 8 portfolio.
In summary, while the potential to clear debt service and the favorable gap between market rent and FMR present opportunities, the limited demand from renters and unknown DOM suggest that ZIP 40444 may not be ideal for a Section 8 investment. Landlords should carefully consider these factors before proceeding.
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.