Location: Louisville, KY | Metro: Louisville, KY-IN 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 | $1,230 |
| 1 Bedroom | $1,340 |
| 2 Bedrooms | $1,620 |
| 3 Bedrooms | $2,100 |
| 4 Bedrooms | $2,430 |
| 5 Bedrooms | $2,819 |
| 6 Bedrooms | $3,157 |
| 7 Bedrooms | $3,410 |
| 8 Bedrooms | $3,581 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $2,100 | $379,194 | 0.55% | F |
| 4BR | $2,430 | $567,961 | 0.43% | F |
U.S. Census Bureau data (2024)
The ZIP code 40026 presents several challenges for potential Section 8 landlords. Firstly, the market rent stands at $2,069, while the Fair Market Rent (FMR) for FY 2024 is set at $1950. This discrepancy can lead to higher tenant turnover, as the FMR may not cover the full cost of market rent, creating financial strain for tenants. Secondly, vacancy exposure is a significant concern, especially given that the days on market (DOM) data is currently unavailable. This lack of information makes it difficult to predict how long properties might remain vacant between tenancies. Additionally, the typical home value in the area is $498,282, while the median income is $134,254. This suggests that landlords may face deferred maintenance issues due to the high cost of upkeep relative to the income levels of the residents.
Despite these risks, the ZIP code 40026 has a 7.8% renter share, which is indicative of a high concentration of renters. High renter density typically correlates with increased demand for housing vouchers, thereby potentially stabilizing the rental market for Section 8 properties. The presence of a substantial number of renters can also help mitigate some of the risks associated with vacancy and tenant turnover, as there is a ready pool of potential tenants who may be interested in subsidized housing options.
In conclusion, the risks associated with investing in Section 8 properties in ZIP 40026 are moderate. While there are concerns about tenant turnover and deferred maintenance, the high renter density provides a counterbalance that can support stable occupancy rates.
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.