Location: Crittenden County, KY | Metro: Livingston County, 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 | $780 |
| 1 Bedroom | $870 |
| 2 Bedrooms | $1,050 |
| 3 Bedrooms | $1,250 |
| 4 Bedrooms | $1,600 |
| 5 Bedrooms | $1,856 |
| 6 Bedrooms | $2,079 |
| 7 Bedrooms | $2,245 |
| 8 Bedrooms | $2,357 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,050 | $79,769 | 1.32% | A |
| 3BR | $1,250 | $145,194 | 0.86% | C |
U.S. Census Bureau data (2024)
Salem, KY's ZIP code 42078 is characterized by a modest-sized population of 1,702 residents. Only 10.5% of these residents are renters, indicating a predominantly owner-occupied community. The median household income in this area stands at $56,397, suggesting a middle-class neighborhood where families have stable financial footing. Median home values are also reflective of this economic profile, sitting at $109,232, which is indicative of affordable housing options.
The rental economics of ZIP 42078 present an interesting opportunity for investors. According to the Fair Market Rent (FMR) set by the Department of Housing and Urban Development (HUD) for the fiscal year 2026, the FMR for the metro area is $900. However, the actual market rent, as reported by the Census Bureau's American Community Survey (ACS), is significantly lower at $669. This discrepancy means that properties eligible for Section 8 vouchers could command rents above the market rate, providing a potential buffer against financial risks associated with tenant turnover and maintenance.
For hands-off voucher operators, ZIP 42078 might not be the most appealing investment due to the low percentage of renters and the relatively high gap between FMR and market rent. This scenario could lead to fewer applications for available units, making it harder to fill vacancies with Section 8 tenants. On the other hand, for hands-on value-add buyers looking to improve properties and increase their rental value closer to the HUD FMR, this ZIP code presents a unique opportunity. By enhancing the quality and appeal of rental properties, investors can attract a wider range of tenants, including those who qualify for Section 8 vouchers, thereby maximizing their returns while still offering affordable housing solutions.
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.