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 | $730 |
| 1 Bedroom | $730 |
| 2 Bedrooms | $960 |
| 3 Bedrooms | $1,230 |
| 4 Bedrooms | $1,540 |
| 5 Bedrooms | $1,786 |
| 6 Bedrooms | $2,000 |
| 7 Bedrooms | $2,160 |
| 8 Bedrooms | $2,268 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $960 | $209,450 | 0.46% | F |
| 3BR | $1,230 | $321,773 | 0.38% | F |
| 4BR | $1,540 | $389,567 | 0.4% | F |
U.S. Census Bureau data (2024)
ZIP code 40107 is located in Bardstown, Kentucky, and represents a modest-sized neighborhood with a population of 2,187 residents. The area has a relatively low rental rate, with only 21.0% of the population being renters, indicating that it is predominantly owner-occupied. The median household income in this ZIP code stands at $60,398, which suggests a middle-class community. Additionally, the median home value is $254,852, reflecting a stable housing market.
When it comes to the economics of renting, the Fair Market Rent (FMR) for ZIP 40107 is set at $980 for the fiscal year 2026, according to HUD's metro FMR guidelines. In contrast, the actual market rent, as reported by the Census Bureau's American Community Survey (ACS), is slightly higher at $1,053. This indicates a small premium for market rents over the subsidized rates, but the gap is narrow enough to suggest that landlords participating in the Section 8 program can still achieve reasonable profitability.
The question of whether ZIP 40107 is suitable for a hands-off voucher operator or requires a more active value-add approach hinges on these economic factors. Given the relatively low rental rate and the close alignment between FMR and market rent, a hands-off operator could find success in this area. However, the potential for increasing rents above the FMR level also opens opportunities for a hands-on investor looking to add value through property improvements or enhanced services. Such an investor might aim to capture the additional $73 per month that the market currently supports over the FMR, thereby maximizing returns while still offering affordable housing options.
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.