Location: Lexington-Fayette, 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 | $1,010 |
| 1 Bedroom | $1,230 |
| 2 Bedrooms | $1,450 |
| 3 Bedrooms | $2,000 |
| 4 Bedrooms | $2,160 |
| 5 Bedrooms | $2,506 |
| 6 Bedrooms | $2,807 |
| 7 Bedrooms | $3,032 |
| 8 Bedrooms | $3,184 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,450 | $259,415 | 0.56% | F |
| 3BR | $2,000 | $344,917 | 0.58% | F |
| 4BR | $2,160 | $413,446 | 0.52% | F |
| 5BR | $2,506 | $485,959 | 0.52% | F |
U.S. Census Bureau data (2024)
The ZIP code 40503 in Lexington, KY, is a moderately renter-heavy area with significant potential for Section 8 tenants. With a population of 27,451, nearly 38.3% of residents are renters, indicating a substantial demand for rental properties. This makes it an attractive market for landlords and small-portfolio investors looking to tap into government-assisted housing programs.
The median household income in ZIP 40503 is $76,482, which provides context for the affordability of the average market rent of $1,517. To put this into perspective, typical rent consumes approximately 19.9% of the local median income. This figure suggests that while rent is not excessively high relative to income, it still represents a considerable portion of monthly earnings for many households.
Comparing the market rent to the Fair Market Rent (FMR) set at $1,330 for FY 2024, there is a discrepancy of $187. Landlords must be aware that the FMR sets the upper limit for what can be charged to tenants with Section 8 vouchers, meaning that rents above $1,330 may not be fully covered by the vouchers. However, the difference is relatively small, and many voucher holders could potentially cover the additional amount out-of-pocket.
A landlord in ZIP 40503 should expect a diverse tenant pool, with a significant number of individuals relying on Section 8 vouchers due to the high percentage of renters and the affordable nature of the FMR compared to the median income. The typical tenant will likely be seeking a balance between affordability and quality of living, making well-maintained properties with reasonable amenities particularly desirable.
To summarize, ZIP 40503 presents a viable opportunity for landlords interested in Section 8 tenants. While the area is not dominated by homeowners, it does have a notable renter base. The local income level supports the market rent, but landlords must adhere to the FMR guidelines to accommodate voucher holders effectively. Expect tenants who value stability and affordability in their housing situation.
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.