Location: Kansas City, MO | Metro: Kansas City, MO-KS 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 | $1,170 |
| 1 Bedroom | $1,270 |
| 2 Bedrooms | $1,440 |
| 3 Bedrooms | $1,880 |
| 4 Bedrooms | $2,250 |
| 5 Bedrooms | $2,610 |
| 6 Bedrooms | $2,923 |
| 7 Bedrooms | $3,157 |
| 8 Bedrooms | $3,315 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,440 | $160,418 | 0.9% | C |
| 3BR | $1,880 | $203,482 | 0.92% | C |
| 4BR | $2,250 | $262,658 | 0.86% | C |
| 5BR | $2,610 | $334,096 | 0.78% | D |
U.S. Census Bureau data (2024)
The market analysis for Section 8 investors in ZIP code 64138, located in Raytown, Missouri, within the Jackson County and Kansas City, MO-KS HUD Metro FMR area, reveals several key points regarding rental economics and property investment.
The HUD Fair Market Rent (FMR) for the zip code in fiscal year 2024 is set at $1,150. In contrast, the Zillow Observed Rent Index (ZORI), which represents the average market rent, stands at $1,393. This indicates that voucher tenants would generally result in a negative cash flow for landlords renting at the HUD FMR, unless they are able to secure premium units that command higher rents. Specifically, landlords would be receiving $243 less per month on average compared to the market rate, leading to a marginal cash flow scenario at best.
To further contextualize these figures, the median home value in the area is $202,523. This yields a rent-to-price ratio of approximately 7.4%, calculated by dividing the annual rent ($1,393 * 12 months = $16,716) by the median home value. This ratio suggests that the rental market is relatively affordable when compared to homeownership costs, which could attract both renters and potential buyers, contributing to overall market stability.
The real estate market in ZIP 64138 shows a quick turnover, with a median Days on Market (DOM) of just 8 days, indicating strong demand for homes. Additionally, only 0.2% of listings required price cuts, suggesting that the housing market is robust and that properties are likely to sell at or near their asking price. These factors can influence the rent-versus-buy dynamics, making it advantageous for investors to hold onto properties rather than sell them quickly.
In conclusion, while the cash flow from voucher tenants may be limited due to the lower HUD FMR compared to the ZORI, the strong demand and stable housing market provide a compelling case for long-term investment in the area. The most favorable angle for investors in ZIP 64138 is stability, given the quick sales and minimal need for price adjustments.
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.