Location: Allen County, KY | Metro: Allen County, KY HUD Metro FMR Area
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 | $890 |
| 1 Bedroom | $930 |
| 2 Bedrooms | $1,100 |
| 3 Bedrooms | $1,420 |
| 4 Bedrooms | $1,700 |
| 5 Bedrooms | $1,972 |
| 6 Bedrooms | $2,209 |
| 7 Bedrooms | $2,386 |
| 8 Bedrooms | $2,505 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,420 | $216,479 | 0.66% | D |
U.S. Census Bureau data (2024)
The analysis of Section 8 real estate in ZIP code 42120 reveals a significant gap between the Fair Market Rent (FMR) and the actual market rent. The FMR for the area is set at $970 for fiscal year 2024, while the Census ACS reports the market rent at $859. This means there is a gap of $111, or approximately 13%, between what the government deems as fair market rent and what the market actually demands.
In ZIP 42120, where only 7.9% of residents are renters, the median home value stands at $195,082, indicating a predominantly owner-occupied community. However, the median income is relatively low at $64,958, suggesting that many potential tenants might rely on housing vouchers to afford their living space.
The fact that the FMR exceeds the market rent by $111 makes it a lucrative opportunity for landlords. Voucher tenants can provide a stable income stream, as the government covers a substantial portion of the rent. This scenario transforms the ZIP 42120 into a yield play, allowing landlords to receive higher rents than the open-market average without significantly increasing the risk of vacancy.
However, accepting Section 8 tenants also comes with its own set of considerations. The cost of maintaining a property under the voucher program can be lower due to the rigorous standards set by the government, but it also requires compliance with HUD regulations. Despite these requirements, the financial benefit of receiving $970 in rent, which is above the local market rate of $859, makes it an attractive option for landlords willing to navigate the process.
Given the context of 7.9% renters and a median income of $64,958, the FMR provides a buffer against the economic challenges faced by many residents. It ensures that landlords can still achieve a reasonable return on investment even when dealing with subsidized housing. This makes ZIP 42120 a promising area for landlords and small-portfolio investors looking to capitalize on the Section 8 program.
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.