Section 8 Fair Market Rent (FMR) for ZIP 42702 - 2027

FY 2027 Fair Market Rent Rates

The ZIP code 42702 in Kentucky presents a unique set of conditions for landlords and small-portfolio investors interested in Section 8 properties. Here's a structured approach to decide if you should invest in this area:

1) Does the Fair Market Rent (FMR) of $1010 for fiscal year 2024 cover the debt service on a property?

• Yes: If the FMR can fully cover your debt service, including mortgage payments, taxes, insurance, and maintenance costs, then the investment is financially viable. However, the exact property type and cost are not specified, so you must calculate based on your specific situation.
• No: If the FMR cannot cover your debt service, then investing in ZIP 42702 is not advisable. The financial burden would be too high, leading to potential losses.

2) How does the market rent compare to the FMR of $1010?

• Above FMR: If the market rent is higher than the FMR, landlords might find it challenging to justify the lower Section 8 rents. This could lead to reduced interest from tenants and slower turnover rates.
• At or Below FMR: If the market rent is equal to or less than the FMR, the gap between market and Section 8 rents is minimized, making it easier to attract tenants. This scenario supports the viability of Section 8 investments.

3) Is there sufficient demand, considering the percentage of renters and days on market (DOM)?

• Sufficient Demand: If the percentage of renters is substantial and the DOM is low, this indicates a healthy rental market where properties are quickly filled. Landlords can expect steady occupancy rates.
• Insufficient Demand: If the percentage of renters is low and the DOM is high, landlords might struggle to fill vacancies, leading to periods without rental income and increased vacancy costs.

Based on these gating questions, landlords should carefully evaluate whether ZIP 42702 meets their investment criteria. The decision ultimately depends on the specifics of the local rental market and the individual financial goals of the investor.

Data Sources: FMR data from HUD (2027).

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.