Location: Madison County, KY | Metro: Estill County, KY
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 | $690 |
| 1 Bedroom | $860 |
| 2 Bedrooms | $980 |
| 3 Bedrooms | $1,320 |
| 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: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,320 | $285,736 | 0.46% | F |
U.S. Census Bureau data (2024)
ZIP 40385, located in Madison County, KY, can serve as a cash-flow anchor within a Section 8 portfolio strategy. The median home value in this ZIP code is $249,138, while the Fair Market Rent (FMR) for the metro area in fiscal year 2026 is set at $920. The market rent for the area is approximately $680, indicating a significant spread between the FMR and market rent. This difference allows landlords to potentially cover their mortgage payments and other expenses, providing a stable source of income.
The spread between the FMR ($920) and the market rent ($680) is substantial, at $240. This means that landlords participating in the Section 8 program can expect to receive a higher rental amount than what the local market typically offers. Given that the median home value is $249,138, the higher rent can help offset the costs associated with owning a property in this ZIP code.
While ZIP 40385 does not present a strong case for being an appreciation play due to the lack of recent price-cut shares and days on market data, it stands out as a reliable cash-flow anchor. The median income in the area is $63,103, and the 18.0% renter share suggests a steady demand for rental properties. Landlords can benefit from the guaranteed rental income provided by the Section 8 program, which helps stabilize their cash flow and ensures consistent returns on investment.
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.