Location: Hancock County, KY | Metro: Owensboro, KY MSA
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 | $760 |
| 1 Bedroom | $770 |
| 2 Bedrooms | $1,000 |
| 3 Bedrooms | $1,320 |
| 4 Bedrooms | $1,330 |
| 5 Bedrooms | $1,543 |
| 6 Bedrooms | $1,728 |
| 7 Bedrooms | $1,866 |
| 8 Bedrooms | $1,959 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,000 | $168,436 | 0.59% | F |
| 3BR | $1,320 | $241,636 | 0.55% | F |
| 4BR | $1,330 | $278,257 | 0.48% | F |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP 42348 (Hawesville, KY) reveals a clear picture when comparing the Federal Market Rent (FMR) and the market rent against the median home value.
Annualizing the 2-bedroom FMR of $950 for fiscal year 2024, we find that the annual rent would be $11,400. Given the median home value of $211,304, this translates into an implied gross yield of approximately 5.4%. This calculation is based on the formula for gross yield: (annual rent / median home value) * 100.
In contrast, using the market rent figure of $630 from the Census ACS, the annual rent amounts to $7,560. With the same median home value, this results in an implied gross yield of about 3.6%.
The difference between these two yields highlights the financial impact of participating in the Section 8 program versus renting at market rates. The 5.4% gross yield under the FMR scenario is significantly higher than the 3.6% yield under the market rent scenario. However, the choice of which yield to target depends heavily on the local rental market dynamics.
Hawesville, KY has a renter density of 20.8%, indicating a relatively low proportion of renters compared to homeowners. This factor suggests that landlords might face challenges in attracting tenants who qualify for Section 8, especially if the majority of residents prefer owning homes rather than renting. Moreover, the N/A-day DOM (days on market) implies incomplete data regarding how quickly rental units are filled, which could further complicate the decision-making process for landlords.
Given these conditions, while the 5.4% gross yield appears more attractive, it is important to consider the practicalities of finding eligible tenants and the potential delays in filling vacancies. Therefore, the market rent scenario with a 3.6% gross yield might be more realistic for most landlords and small-portfolio investors in Hawesville, KY.
To summarize, the FMR scenario offers a higher gross yield, but the market realities of low renter density and potentially longer vacancy periods suggest that the market rent scenario is likely more achievable for the average landlord.
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.