Location: Prairie County, AR | Metro: Little Rock-North Little Rock-Conway, AR 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 | $900 |
| 1 Bedroom | $910 |
| 2 Bedrooms | $1,050 |
| 3 Bedrooms | $1,410 |
| 4 Bedrooms | $1,700 |
| 5 Bedrooms | $1,972 |
| 6 Bedrooms | $2,209 |
| 7 Bedrooms | $2,386 |
| 8 Bedrooms | $2,505 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,050 | $113,023 | 0.93% | C |
| 3BR | $1,410 | $199,222 | 0.71% | D |
| 4BR | $1,700 | $284,278 | 0.6% | F |
U.S. Census Bureau data (2024)
The Section 8 thesis for ZIP code 72086 in Lonoke, Arkansas, is based on the disparity between the Fair Market Rent (FMR) and the actual market rent. The FMR for the area is set at $990 for fiscal year 2024, while the Census American Community Survey (ACS) indicates that the average market rent is $919. This creates a gap of $71, or approximately 7.7%, where the FMR exceeds the market rent.
In this scenario, landlords can benefit significantly from accepting Section 8 vouchers. Given that voucher tenants pay a portion of their income towards rent, which is capped at 30% of their adjusted monthly income, the government covers the remaining amount up to the FMR. For instance, if a tenant's income is $58,743 annually, their monthly contribution would be around $1,468.50 * 0.30 = $440.55. Therefore, the landlord receives the difference between the tenant's payment and the FMR, making it a lucrative yield play. In ZIP 72086, with an FMR of $990, landlords could potentially receive a higher rental income compared to the current market rate of $919.
The median home value in Lonoke, AR, is $200,389, indicating a stable housing market. However, with only 22.3% of residents being renters, landlords might face competition from homeownership opportunities. Nevertheless, the median income of $58,743 suggests that many residents may rely on rental assistance programs, such as Section 8, to afford housing. Thus, accepting voucher tenants can provide a steady stream of income, especially when the FMR is higher than the prevailing market rent.
Landlords should be aware of the administrative aspects involved with Section 8 tenancy. While the financial benefits are clear, there may be additional requirements for maintaining properties to meet HUD standards. Nonetheless, the potential for higher yields makes it a strategic choice for landlords and small-portfolio investors in ZIP 72086, where the FMR exceeds the market rent by $71, or 7.7%. This gap translates into a significant opportunity for those willing to navigate the process of working with voucher tenants.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.