Location: Louisville, KY | Metro: Louisville, KY-IN HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $990 |
| 1 Bedroom | $1,080 |
| 2 Bedrooms | $1,300 |
| 3 Bedrooms | $1,660 |
| 4 Bedrooms | $1,910 |
| 5 Bedrooms | $2,216 |
| 6 Bedrooms | $2,482 |
| 7 Bedrooms | $2,681 |
| 8 Bedrooms | $2,815 |
The economics of Section 8 in ZIP code 40027, located in Louisville, Kentucky, are straightforward. For a two-bedroom apartment, the SAFMR (Small Area Fair Market Rent) for fiscal year 2024 is set at $1320. This SAFMR figure is specifically tailored for this ZIP code, reflecting the unique housing market conditions here.
The SAFMR does not directly equate to the amount a landlord will receive from the Housing Choice Voucher program, which is commonly known as Section 8. Instead, it serves as an upper limit. The actual payment a landlord receives depends on the tenant's portion of the rent and any utility allowances. Typically, the tenant is responsible for paying approximately 30% of their adjusted income towards rent. If we assume an average adjusted income of $1500 for a household eligible for Section 8, the tenant would pay around $450 towards rent.
The remaining balance, up to the SAFMR, is covered by the voucher program. So, if the total rent is $1320 and the tenant pays $450, the voucher would cover the rest, which is $870. However, landlords must also consider utility allowances. These vary but can typically range from $200 to $400 per month. Let's use an average allowance of $300. This brings the total voucher payment to $1170.
To summarize, a landlord in ZIP 40027 can expect to receive about $1170 per month for a two-bedroom unit, assuming the market rent aligns with the SAFMR and the tenant's portion plus utility allowances are factored in. Given that the local market rent data is not available, it's important to compare this figure against prevailing rents to determine if there is a surplus or a gap.
If the local market rent for a two-bedroom unit is higher than the SAFMR, landlords will face a reimbursement gap, meaning they won't be fully compensated for the rent charged. Conversely, if the market rent is lower, landlords might see a surplus, receiving more than the market rate. Without specific local market rent data, we cannot provide an exact surplus or gap amount, but the difference between the local market rent and the SAFMR of $1320 will indicate the financial impact.
Data Sources: FMR data from HUD (2027).
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.