Location: Grayson County, KY | Metro: Bowling Green, 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 | $810 |
| 1 Bedroom | $890 |
| 2 Bedrooms | $1,040 |
| 3 Bedrooms | $1,250 |
| 4 Bedrooms | $1,630 |
| 5 Bedrooms | $1,891 |
| 6 Bedrooms | $2,118 |
| 7 Bedrooms | $2,287 |
| 8 Bedrooms | $2,401 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,040 | $179,425 | 0.58% | F |
| 3BR | $1,250 | $226,029 | 0.55% | F |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP 42207 (Bee Spring, KY) provides a clear picture of potential investment returns. Using the Fair Market Rent (FMR) for a 2-bedroom apartment set at $850 annually for FY 2024, we can calculate an implied gross yield. With a median home value of $191,309, the annualized FMR of $850 translates into a gross yield of approximately 0.44%. This is calculated by taking the annual rental income ($850) and dividing it by the property value ($191,309).
On the other hand, using the market rent figure of $669 (as per Census ACS), the implied gross yield drops to about 0.35%. This calculation is based on the same principle: the annual rental income ($669) divided by the median home value ($191,309).
Given that the renter density in Bee Spring, KY is 25.2%, it's important to consider the likelihood of finding tenants willing to pay the higher FMR rate versus the lower market rent rate. The N/A-day DOM (days on market) suggests that there might be limited data available regarding how quickly properties are rented out, making it difficult to predict the exact time it would take to find a tenant.
In reality, achieving the higher FMR rate might be challenging due to the relatively low renter density. Most investors in this area would likely find the market rent rate of $669 more achievable, leading to a gross yield of 0.35%. While the FMR rate offers a higher gross yield of 0.44%, the difficulty in securing tenants at this price point could make the lower market rent rate a more practical scenario for most investments in ZIP 42207.
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.