Section 8 Fair Market Rent (FMR) for ZIP 42303 - 2027

Investment Score for ZIP 42303

Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)

FY 2027 Fair Market Rent Rates

Unit Size	Monthly FMR
Studio	$930
1 Bedroom	$940
2 Bedrooms	$1,230
3 Bedrooms	$1,630
4 Bedrooms	$1,640
5 Bedrooms	$1,902
6 Bedrooms	$2,130
7 Bedrooms	$2,300
8 Bedrooms	$2,415

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
1BR	$940	$78,445	1.2%	B
2BR	$1,230	$141,025	0.87%	C
3BR	$1,630	$222,136	0.73%	D
4BR	$1,640	$366,809	0.45%	F
5BR	$1,902	$512,524	0.37%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 42303 (Owensboro, KY) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 42303 is set by HUD for 2026 as follows: - 0BR: $890 - 1BR: $900 - 2BR: $1180 - 3BR: $1560 - 4BR: $1560 Comparing these figures to the actual rents in the area, we find that the Zillow median price for a 2-bedroom rental unit is $137,895. However, the price-to-FMR ratio is 9.7x, which suggests that the actual rent prices are significantly higher than the FMR. For instance, the Zillow median price for a 2BR unit implies a monthly rent of approximately $1,149, which is notably above the FMR of $1180. This means that voucher holders face constraints in finding suitable housing within their budget. They might struggle to secure units that meet their needs without exceeding the FMR limits. #### Affordability & Renter Profile ZIP code 42303 has a population of 42,119, with 34.2% of residents being renters. The occupancy rate stands at 95.3%, indicating a relatively tight rental market. Given that 21.9% of the median household income ($64,773) is allocated towards a 2BR unit, it is clear that renters are facing significant financial pressure. The median household income is not particularly high, and the cost of living, especially in terms of housing, is a substantial portion of their earnings. This suggests that the market is competitive, with limited options for affordable housing. #### Investor Angle From an investor perspective, the ZIP code appears to be cash-flow positive at FMR levels. The FMR for a 2BR unit is $1180, while the Zillow median price suggests a higher potential rental rate of around $1,149 per month. However, since the FMR is set lower to ensure affordability, investors who aim to cater specifically to Section 8 voucher holders must adhere to these rates. The investment grade can be assessed by looking at the demand for rental properties and the ability to attract tenants using Section 8 vouchers. With a high occupancy rate and a significant percentage of renters, there is strong demand. However, the challenge lies in the high price-to-FMR ratio, which indicates that the actual market rents are much higher than the FMR. This could mean that landlords might be hesitant to accept Section 8 vouchers due to the lower rental rates compared to market value. #### Specific Actionable Insights 1. **Focus on Units Below FMR**: Investors should consider acquiring properties where the rent is below the FMR. For example, a 2BR unit renting for $1,100 would be attractive to voucher holders and still offer a reasonable return on investment. This approach ensures compliance with HUD guidelines while maximizing the likelihood of tenant retention. 2. **Target Smaller Units**: Given the high price-to-FMR ratio, smaller units (0BR and 1BR) might be more affordable for voucher holders. These units typically have lower maintenance costs and can be rented out more easily. A 1BR unit renting for $900 aligns perfectly with the FMR and could be a lucrative option for investors focusing on Section 8. 3. **Enhance Property Value**: To remain competitive in a tight rental market, investors should focus on enhancing the value of their properties through renovations and upgrades. This could include improving energy efficiency, updating appliances, and ensuring that the property meets all safety standards. Such improvements can help attract tenants willing to pay closer to the FMR, thereby increasing the chances of successful tenancy. #### Bottom Line For Section 8-focused investors, ZIP code 42303 presents a mixed picture. While there is strong demand for rental properties and a significant number of renters, the high price-to-FMR ratio poses challenges. The recommendation would be to **Hold** if you already own properties in this ZIP code, but **Skip** if you are considering new investments. The tight market and high actual rents make it difficult to compete effectively with non-voucher properties. If you decide to invest, focus on units that are priced below or at the FMR to ensure they are attractive to voucher holders and can generate steady cash flow. --- This analysis provides a detailed look into the dynamics of the rental market in ZIP code 42303, highlighting key points for both voucher holders and investors. It underscores the importance of understanding local market conditions and adhering to HUD guidelines when making investment decisions.

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.