Location: McCreary County, KY | Metro: McCreary County, KY
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 | $800 |
| 1 Bedroom | $1,030 |
| 2 Bedrooms | $1,120 |
| 3 Bedrooms | $1,410 |
| 4 Bedrooms | $1,570 |
| 5 Bedrooms | $1,821 |
| 6 Bedrooms | $2,040 |
| 7 Bedrooms | $2,203 |
| 8 Bedrooms | $2,313 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,120 | $88,755 | 1.26% | A |
| 3BR | $1,410 | $128,919 | 1.09% | B |
| 4BR | $1,570 | $153,462 | 1.02% | B |
U.S. Census Bureau data (2024)
A landlord considering purchasing a property in ZIP code 42653 (Stearns, KY) for Section 8 purposes should follow this decision tree:
1) Does FMR $960 (metro FY 2026) clear debt service on a $103,570 property?
Yes. The Fair Market Rent (FMR) of $960 is sufficient to cover the debt service on a property valued at $103,570. Assuming a typical mortgage rate and term, the monthly payment would be lower than the FMR, allowing for positive cash flow.
2) Is market rent $645 (Census ACS) above, at, or below FMR?
No. The market rent of $645 is below the FMR of $960. This indicates that the rental income from market-rate tenants alone would not meet the FMR required for Section 8 eligibility. Landlords must rely on the Section 8 program to bridge the gap between market rent and the FMR.
3) Are 26.1% renters + N/A-day DOM enough demand?
It depends. With 26.1% of the population being renters, there is a moderate level of demand for rental properties in Stearns, KY. However, the lack of data on days on market (DOM) makes it difficult to assess how quickly properties can be leased. If the local real estate market shows quick leasing times, the demand could be considered strong. Otherwise, it might be weak.
If the landlord answers yes to the first question, they should proceed to the second. If the answer to the second question is no, then the third question becomes critical. Given the market rent is below the FMR, landlords need to ensure there is enough demand for Section 8 vouchers. The presence of a significant percentage of renters suggests some demand, but the absence of DOM data leaves uncertainty about the speed of lease-ups.
In conclusion, a landlord can purchase in ZIP 42653 if they are willing to accept the dependency on Section 8 subsidies to cover the difference between market rent and the FMR. The success of such an investment hinges on the availability of Section 8 vouchers and the efficiency of the local rental market in filling vacancies.
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.