Section 8 Fair Market Rent (FMR) for ZIP 40422 - 2027

Location: Mercer County, KY | Metro: Boyle County, KY

Investment Score for ZIP 40422

Monthly Rent (2BR)

$930

Median Price (2BR)

$167,829

1% Rule

0.55%

Annual Yield

6.65%

Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)

FY 2027 Fair Market Rent Rates

Unit Size	Monthly FMR
Studio	$720
1 Bedroom	$730
2 Bedrooms	$930
3 Bedrooms	$1,190
4 Bedrooms	$1,310
5 Bedrooms	$1,520
6 Bedrooms	$1,702
7 Bedrooms	$1,838
8 Bedrooms	$1,930

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
2BR	$930	$167,829	0.55%	F
3BR	$1,190	$247,645	0.48%	F
4BR	$1,310	$351,289	0.37%	F
5BR	$1,520	$475,070	0.32%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

Population

25,950

Median Household Income

$59,615

Housing Units

10,740

Renter Percentage

36.1%

Occupancy Rate

92.8%

Renter Occupied

3,595

The real estate market in Danville, Kentucky (ZIP 40422) presents a unique opportunity for both landlords and small-portfolio investors. The median home value stands at $247,926, indicating a relatively stable housing market. With only 0.3% of listings experiencing reductions, it's clear that sellers maintain significant pricing power. This low reduction rate, coupled with a median days on market (DOM) of just 37 days, suggests strong demand and a competitive environment where homes sell quickly without needing to lower prices.

On the rental side, the forward market rent (FMR) for the Danville metro area in fiscal year 2026 is projected to be $940, while the current market rent, measured by the Zillow Observed Rent Index (ZORI), is $1,321. This gap highlights an immediate advantage for property owners who can leverage higher market rents, suggesting a favorable short-term rental yield scenario. However, for long-term investors, the appreciation thesis becomes less straightforward. The current stability in home values, as reflected by the median home value and the low reduction rate, points towards a market that is unlikely to experience rapid price increases.

Investors should consider the following:

Pricing Power: The quick turnover of homes and minimal price reductions indicate a robust seller's market, allowing for maintenance of current listing prices or slight increases.
Rental Income Potential: The discrepancy between the FMR and ZORI suggests a near-term rental income advantage, but investors must be prepared for potential downward pressure on rents as the market adjusts toward the FMR.
Long-Term Appreciation: Given the current data, appreciation is expected to be modest. Investors should focus on steady cash flow rather than rapid capital gains.

The setup in Danville, characterized by its median home value, low reduction rate, and quick sales cycle, supports a strategy focused on maintaining property values and leveraging rental yields. Long-term investors should anticipate moderate growth and plan their investments accordingly.

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.