Location: Nelson County, KY | Metro: Nelson County, 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 | $790 |
| 1 Bedroom | $800 |
| 2 Bedrooms | $1,040 |
| 3 Bedrooms | $1,330 |
| 4 Bedrooms | $1,610 |
| 5 Bedrooms | $1,868 |
| 6 Bedrooms | $2,092 |
| 7 Bedrooms | $2,259 |
| 8 Bedrooms | $2,372 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $800 | $177,787 | 0.45% | F |
| 2BR | $1,040 | $201,488 | 0.52% | F |
| 3BR | $1,330 | $267,014 | 0.5% | F |
| 4BR | $1,610 | $397,762 | 0.4% | F |
| 5BR | $1,868 | $497,714 | 0.38% | F |
U.S. Census Bureau data (2024)
The analysis for Section 8 properties in ZIP code 40004 reveals a significant gap between the Fair Market Rent (FMR) and the actual market rent as measured by Zillow's Observed Rental Index (ZORI). The FMR for the metro area in fiscal year 2026 is set at $1,030, while the market rent stands at $1,069. This represents a difference of $39, or approximately 3.79%, where the market rent exceeds the FMR.
When the FMR is less than the market rent, it signals that landlords accepting Section 8 vouchers will be renting their units below the open-market rate. In the context of Bardstown, KY, this means that landlords who opt into the Section 8 program will be forgoing potential rental income of $39 per month compared to what they could earn in the private market. Given that only 26.7% of residents in Bardstown are renters, landlords need to carefully consider the demand for rental properties and whether the benefits of steady rental income from voucher holders outweigh the lower rates.
The median home value in Bardstown is $262,929, indicating a moderate housing market. However, the median household income of $66,578 suggests that many residents may struggle to afford market-rate rents, making the Section 8 program particularly relevant for this area. Despite the lower rental rates compared to the market, the program ensures a reliable tenant who can pay consistently, reducing the risk of vacancy and delinquency.
However, the cost of housing voucher tenants below open-market rates must be weighed against the stability they provide. For landlords and small-portfolio investors, the decision to participate in the Section 8 program should be based on a thorough understanding of local market conditions and the financial implications of accepting slightly lower rent payments in exchange for guaranteed income and reduced risk.
In summary, the $39 gap between the FMR and ZORI in ZIP 40004 highlights the trade-off landlords face when considering Section 8 vouchers. While this may represent a slight reduction in potential rental income, it also offers a way to ensure stable occupancy and consistent cash flow, which can be crucial in a market where a significant portion of the population relies on government assistance to meet their housing needs.
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.