Location: Nelson County, KY | Metro: Elizabethtown, 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 | $780 |
| 1 Bedroom | $790 |
| 2 Bedrooms | $990 |
| 3 Bedrooms | $1,370 |
| 4 Bedrooms | $1,650 |
| 5 Bedrooms | $1,914 |
| 6 Bedrooms | $2,144 |
| 7 Bedrooms | $2,316 |
| 8 Bedrooms | $2,432 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $990 | $162,810 | 0.61% | D |
| 3BR | $1,370 | $245,409 | 0.56% | F |
| 4BR | $1,650 | $306,878 | 0.54% | F |
U.S. Census Bureau data (2024)
The Section 8 thesis in ZIP code 42748, centered around Hodgenville, KY, highlights a significant gap between the Fair Market Rent (FMR) and the actual market rent. For fiscal year 2024, the FMR stands at $890, while the Census ACS reports the market rent at $784. This discrepancy amounts to a difference of $106, or approximately 13.5%. Given that the FMR exceeds the market rent, it positions properties in this area as attractive yield plays for landlords and small-portfolio investors.
The higher FMR means that landlords who participate in the Section 8 Housing Choice Voucher program can receive rental payments that are above the local market rate. This is particularly beneficial in an environment where only 19.3% of residents are renters, indicating a potentially competitive market for rental units. With a median home value of $226,064 and a median income of $65,691, the economic profile of Hodgenville suggests that many homeowners might be hesitant to rent out their properties at lower market rates, making the opportunity to lease at FMR levels even more appealing.
The additional $106 per month, or 13.5%, represents a tangible financial advantage for landlords willing to accept Section 8 vouchers. It allows them to secure a better return on investment compared to renting at purely market-driven rates. Furthermore, the steady and government-backed nature of these payments can provide a level of financial security and predictability that is often lacking in the open rental market.
However, participating in the Section 8 program also comes with its own set of requirements and regulations that must be adhered to. Landlords need to ensure their properties meet certain quality standards and agree to regular inspections. Despite these considerations, the financial incentives of receiving rents closer to the FMR of $890, rather than the lower market rate of $784, make this a compelling strategy for maximizing yields in ZIP 42748.
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.