Location: Lyon County, KY | Metro: Clarksville, TN-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 | $990 |
| 1 Bedroom | $990 |
| 2 Bedrooms | $1,220 |
| 3 Bedrooms | $1,690 |
| 4 Bedrooms | $2,040 |
| 5 Bedrooms | $2,366 |
| 6 Bedrooms | $2,650 |
| 7 Bedrooms | $2,862 |
| 8 Bedrooms | $3,005 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,220 | $172,480 | 0.71% | D |
| 3BR | $1,690 | $258,859 | 0.65% | D |
| 4BR | $2,040 | $445,180 | 0.46% | F |
U.S. Census Bureau data (2024)
A skeptical investor considering Eddyville, KY (ZIP 42038) might raise several concerns regarding the feasibility of investing in Section 8 properties. The first objection is whether the Fair Market Rent (FMR) of $890 for the fiscal year 2024 will be sufficient to cover the mortgage on a typical home priced at $155,335. To address this, it's important to calculate the monthly mortgage payment based on current interest rates. Assuming a fixed-rate mortgage with an average interest rate of 4.5% and a 30-year term, the monthly payment would be approximately $762. This means that the FMR of $890 does indeed cover the mortgage payment, leaving some room for property taxes, insurance, and maintenance costs.
The second concern revolves around the percentage of renters in the area. With only 22.8% of the population renting, an investor might question if there is enough demand for rental properties. While 22.8% may seem low compared to urban areas, it's crucial to consider the local context. In rural communities like Eddyville, the rental market can still be robust due to limited housing options and lower overall housing costs. However, the data does not provide detailed insights into the specific demand for Section 8 rentals, which could be influenced by factors such as the availability of public assistance programs and the number of families qualifying for Section 8.
The final objection pertains to the adequacy of voucher payments in keeping up with market rents. Currently, the market rent for a two-bedroom apartment in ZIP 42038 is $771. The Section 8 voucher payment is set at a level intended to cover the majority of eligible households' rent, but it may not always match the exact market rate. As of now, the voucher payment is likely close to the $890 FMR, which exceeds the market rent of $771. This suggests that voucher holders should have sufficient funds to cover their rent without significant out-of-pocket expenses. However, future adjustments to voucher amounts depend on federal funding and policy changes, which could impact the ability of voucher holders to afford market rents.
In summary, while there are valid concerns about covering mortgage payments, the demand for rental properties, and the adequacy of voucher payments, the data indicates that investing in Section 8 properties in Eddyville, KY (ZIP 42038) is financially viable. The FMR covers the mortgage, and although the rental market share is modest, it aligns with the local economic conditions. Voucher payments currently exceed market rents, but long-term stability requires monitoring federal policies.
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.