Section 8 Fair Market Rent (FMR) for ZIP 42642 - 2027

FY 2027 Fair Market Rent Rates

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

Housing Authorities Serving ZIP 42642

• Lake Cumberland Housing Agency Inc (Jamestown, KY) - 520 Section 8 vouchers
• Housing Authority of Somerset (Somerset, KY) - 322 Section 8 vouchers
• Housing Authority of Columbia (Columbia, KY)
• Housing Authority of Liberty (Liberty, KY)

A skeptical investor considering Russell Springs, KY (ZIP 42642), might have several concerns regarding the feasibility of investing in Section 8 properties. Let's address these concerns head-on using available data.

Will Fair Market Rent (FMR) of $890 (metro FY 2026) cover the mortgage on a $162,243 home?

• The average mortgage payment on a $162,243 home, assuming a 30-year fixed-rate mortgage at a 4% interest rate and a 20% down payment, would be approximately $735 per month. This means that the FMR of $890 could indeed cover the mortgage payment, leaving some room for maintenance and other costs. However, it's crucial to note that the FMR is set annually by HUD and may not always align perfectly with market conditions or the specifics of individual mortgages.

Is there enough renter demand at 29.5%?

• The rental vacancy rate of 29.5% suggests that there is a significant supply of rental units relative to demand. While this percentage indicates a higher-than-average vacancy rate, it does not necessarily mean that there is insufficient demand for Section 8 properties. The demand for affordable housing can often be high even in areas with overall low occupancy rates. Additionally, the local job market and population trends should be considered to better understand the potential for sustained renter demand.

Will vouchers keep pace with $691 market rents?

• The voucher amount of $890 is above the current market rent of $691, which means that landlords participating in the Section 8 program can expect to receive a higher rent than what the market alone dictates. This cushion helps protect against market fluctuations and ensures a steady income stream. However, the challenge lies in whether the government will continue to adjust voucher amounts in line with rising market rents. Historically, adjustments have been made, but they are not always timely or sufficient to match inflation or local market dynamics.

In conclusion, while the data provides a snapshot of the financial landscape in Russell Springs, KY, it's important to consider broader economic factors and local conditions that could influence investment outcomes. The ability of FMR to cover mortgage payments and the adequacy of voucher amounts are positive indicators, but the high vacancy rate warrants further investigation into the local rental market's stability and growth potential.

Data Sources: FMR data from HUD (2027). 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.