Location: Breckinridge County, KY | Metro: Meade 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 | $740 |
| 1 Bedroom | $740 |
| 2 Bedrooms | $970 |
| 3 Bedrooms | $1,320 |
| 4 Bedrooms | $1,520 |
| 5 Bedrooms | $1,763 |
| 6 Bedrooms | $1,975 |
| 7 Bedrooms | $2,133 |
| 8 Bedrooms | $2,240 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,320 | $253,210 | 0.52% | F |
U.S. Census Bureau data (2024)
The analysis of the Section 8 cap-rate scenario for ZIP code 40176 provides valuable insights into potential investment returns. Based on the Fair Market Rent (FMR) for a two-bedroom apartment at $1040 per month for fiscal year 2024, the annualized rental income would be $12,480. This figure is derived directly from the provided data, offering a clear benchmark for Section 8 rental rates in the area.
To calculate the implied gross yield using the FMR, we divide the annual rental income by the median home value. In this case, the median home value is $240,316. The calculation gives us an implied gross yield of approximately 5.2% ($12,480 / $240,316). This represents the percentage of the home's value that can be expected as annual rental income under the Section 8 program.
In contrast, the market rent for ZIP 40176 is listed as N/A, indicating insufficient data to provide a reliable figure. However, if we were to consider a hypothetical market rent scenario, it would likely offer a higher gross yield than the Section 8 rate, assuming the market rent exceeds $1040 per month. Without a specific market rent figure, we cannot provide a precise comparison, but it is reasonable to infer that market rents could potentially double or triple the Section 8 rate, leading to a gross yield significantly above 5.2%.
Given the 14.4% renter density in ZIP 40176, it is important to note that the demand for rental properties, including those participating in the Section 8 program, is relatively low compared to other areas. This suggests that while the Section 8 program provides a guaranteed source of income, it may not be the most lucrative option in terms of gross yield. Additionally, the lack of data on days-on-market (DOM) makes it challenging to predict how quickly a property might be leased under the Section 8 program versus the open market.
In conclusion, the Section 8 cap-rate for ZIP 40176 implies a gross yield of about 5.2%, based on the provided FMR. While this offers stability and predictability for landlords, it is less attractive than potential market rents. Investors should weigh these factors carefully, considering the trade-offs between guaranteed income and higher yields, along with the local rental market dynamics and tenant preferences.
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.