Location: Harlan County, KY | Metro: Harlan 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 | $720 |
| 1 Bedroom | $780 |
| 2 Bedrooms | $950 |
| 3 Bedrooms | $1,240 |
| 4 Bedrooms | $1,250 |
| 5 Bedrooms | $1,450 |
| 6 Bedrooms | $1,624 |
| 7 Bedrooms | $1,754 |
| 8 Bedrooms | $1,842 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $950 | $57,863 | 1.64% | A+ |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP 40807 in Cumberland, KY, reveals a challenging investment environment. With an annualized Fair Market Rent (FMR) for a two-bedroom apartment at $870 (for fiscal year 2026, metro area), and the Census ACS reporting a market rent of $769, we can calculate the implied gross yield against the median home value of $55,661.
First, let's consider the FMR scenario. Assuming the property is valued at $55,661 and it is rented out at $870 per month, the annual rental income would be $10,440. This results in a gross yield of approximately 18.8%, calculated by dividing the annual rental income by the property value ($10,440 / $55,661).
Next, using the market rent figure of $769 per month, the annual rental income drops to $9,228. The gross yield in this case is about 16.6% ($9,228 / $55,661).
The gross yield comparison between these two scenarios shows that the FMR scenario offers a higher potential return, at 18.8% versus 16.6%. However, the reality of the situation is influenced by the 20.8% renter density and the fact that the Days on Market (DOM) is listed as N/A. A lower renter density suggests that there might be less demand for rentals, which could affect the ability to maintain market rents or even FMRs. The N/A DOM indicates either a lack of data or that listings are not staying on the market long enough to provide meaningful insights into how quickly properties are being leased.
In conclusion, while the FMR scenario presents a more attractive gross yield, the actual performance of Section 8 properties in ZIP 40807 is likely closer to the market rent scenario due to the low renter density. Landlords and investors should prepare for the possibility of lower rental income than the FMR suggests, aligning more closely with the $769 monthly market rent, which implies a gross yield of around 16.6%. This conservative approach ensures a more accurate assessment of potential returns in this specific ZIP code.
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.