Location: Todd 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: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,220 | $148,823 | 0.82% | C |
| 3BR | $1,690 | $226,454 | 0.75% | D |
| 4BR | $2,040 | $317,833 | 0.64% | D |
U.S. Census Bureau data (2024)
The ZIP code 42220, located in Elkton, KY, presents an interesting scenario for real-estate investment, particularly under the lens of Section 8 criteria. With a Fair Market Rent (FMR) set at $1150 for fiscal year 2024, it stands above the local market rent of $910, indicating a potential for higher rental income through Section 8 contracts. However, the median home value in this area is $213,463, which suggests that property acquisition costs can be relatively high.
On the yield axis, the discrepancy between the FMR and market rent signals a positive outlook for landlords willing to enter into Section 8 agreements. This difference allows for a premium over the standard market rate, enhancing profitability. Conversely, on the stability axis, the data points to a less secure market. Only 22.1% of residents are renters, which might indicate a limited pool of potential tenants. The average household income of $60,965 is another factor that could influence the stability of rental payments, though without daily days on market (DOM) data, it's challenging to gauge the exact turnover rate and its impact on cash flow.
Given these specifics, ZIP 42220 leans towards being a steady-cashflow zone rather than a high-yield/low-stability flip-style market. The higher FMR compared to the local market rent supports consistent income generation for landlords who can navigate the requirements of Section 8. Yet, the significant portion of homeowners and potentially slower turnover rates due to the limited rental population suggest a market that values long-term, stable investments over quick flips. To summarize, with a FMR of $1150 versus a market rent of $910, and considering the median home value and income levels, this area is best suited for those seeking reliable returns rather than rapid gains.
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.