Location: Bowling Green, 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 |
|---|---|---|---|---|
| 3BR | $1,250 | $209,356 | 0.6% | F |
U.S. Census Bureau data (2024)
The analysis of the Section 8 cap rate scenario for ZIP code 42285 reveals two distinct outcomes based on the available data.
In the first scenario, using the annualized Fair Market Rent (FMR) for a 2-bedroom unit at $850 per month as provided by the FY 2024 data, the gross yield can be calculated. With a median home value of $167,523, the implied gross yield for a Section 8 property would be approximately 6%. This calculation assumes that the property is rented out at the full FMR rate and is occupied year-round.
The second scenario, where market rent is not applicable (N/A), does not provide a direct basis for calculating an alternative gross yield. However, it's important to note that market rent conditions can significantly influence the attractiveness of Section 8 properties to investors. When market rents are high, Section 8 properties might seem less appealing due to the lower rental rates compared to what could be obtained in the open market. Conversely, when market rents are low or uncertain, Section 8 properties offer a stable income stream.
Given the 20.5% renter density in ZIP 42285, the first scenario with the $850 monthly FMR appears more realistic. The lower renter density suggests that a significant portion of the housing stock is owner-occupied, which aligns with the stability offered by Section 8 rents. Additionally, the N/A-day Days on Market (DOM) indicates that there is no recent data on how long properties typically take to rent, which could mean that the market is either slow-moving or there is limited turnover, further supporting the reliance on steady Section 8 rental income.
The 6% gross yield derived from the Section 8 FMR provides a clear benchmark for potential investors considering properties in ZIP 42285. While this figure might not be as attractive as higher yields found in other markets, it offers the security of government-backed rent payments, which is particularly valuable in areas with limited market rent data and low renter density.
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.