Location: Knott County, KY | Metro: Knott 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 | $700 |
| 1 Bedroom | $780 |
| 2 Bedrooms | $980 |
| 3 Bedrooms | $1,170 |
| 4 Bedrooms | $1,370 |
| 5 Bedrooms | $1,589 |
| 6 Bedrooms | $1,780 |
| 7 Bedrooms | $1,922 |
| 8 Bedrooms | $2,018 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,170 | $125,124 | 0.94% | C |
U.S. Census Bureau data (2024)
The Section 8 thesis for ZIP code 41822 is centered around the significant gap between the Fair Market Rent (FMR) and the actual market rent. For fiscal year 2026, the FMR stands at $870, while the Census ACS reports the average market rent at $520. This creates a $350 difference, or approximately a 67.3% discount, when comparing the market rent to the FMR.
In this scenario where FMR exceeds the market rent, voucher tenants become a lucrative opportunity for landlords and small-portfolio investors. The discrepancy means that landlords can collect rent payments close to the FMR through the Housing Choice Voucher program, effectively making it a yield play. This is particularly advantageous given the context of 41822, where 35.3% of residents are renters and the median income is $24,638. These factors suggest a high demand for affordable housing, which is further supported by the relatively low median home value of $91,943.
The lower market rent compared to the FMR also indicates that the cost of housing voucher tenants is below open-market rates. This could be due to various factors such as an oversupply of rental units, a predominantly low-income population, or a combination of both. Regardless, the situation presents a compelling investment thesis for those looking to capitalize on the government's willingness to subsidize rents up to $870, while the market only demands $520. This subsidy can cover maintenance costs, property taxes, and other expenses, thereby increasing the overall profitability of rental properties in this area.
To summarize, the gap between the FMR and market rent in ZIP 41822 offers a unique opportunity for landlords and small-portfolio investors to maximize their returns by leveraging the Housing Choice Voucher program. The high percentage of renters and the median income levels support the attractiveness of this investment strategy, making it a sound choice for those interested in real estate in this region.
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.