Location: Muhlenberg 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 |
|---|---|---|---|---|
| 3BR | $1,320 | $177,602 | 0.74% | D |
U.S. Census Bureau data (2024)
The market analysis for Section 8 investors in ZIP code 42372, located in Muhlenberg County, KY, reveals a favorable environment for those seeking rental income. The HUD Fair Market Rent (FMR) for the area is set at $850 per month for FY 2024, which is significantly higher than the average market rent of $611 reported by the Census Bureau's American Community Survey (ACS).
This disparity means that voucher tenants will generally cashflow at the FMR level, providing landlords with a reliable source of income. The difference between the HUD FMR and the market rent suggests that properties rented to voucher holders can command a premium over non-voucher rentals, making it possible to achieve positive cashflow even with typical maintenance costs.
The median home value in the ZIP code is $134,192. Using the HUD FMR of $850, we can calculate a rent-to-price ratio of approximately 0.78%. This ratio indicates that rental income represents a small percentage of the total property value, which is typical for rural areas but still offers solid returns when compared to mortgage payments and other expenses.
Note that the data does not provide a specific median days on market (DOM) or the percentage of homes that experience price cuts. However, given the strong demand for affordable housing and the higher FMR compared to market rents, it is reasonable to assume that rental properties will have a steady occupancy rate and limited need for vacancy periods.
The strongest investor angle in ZIP 42372 is cashflow. With the HUD FMR well above the market rent, landlords can expect consistent, positive cashflow from Section 8 tenants, making this an attractive option for small-portfolio investors looking to generate passive income without significant risk.
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.