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 | $990 |
| 1 Bedroom | $1,070 |
| 2 Bedrooms | $1,290 |
| 3 Bedrooms | $1,650 |
| 4 Bedrooms | $1,890 |
| 5 Bedrooms | $2,192 |
| 6 Bedrooms | $2,455 |
| 7 Bedrooms | $2,651 |
| 8 Bedrooms | $2,784 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,290 | $264,612 | 0.49% | F |
| 3BR | $1,650 | $357,066 | 0.46% | F |
| 4BR | $1,890 | $451,662 | 0.42% | F |
| 5BR | $2,192 | $595,178 | 0.37% | F |
U.S. Census Bureau data (2024)
The ZIP code 40031, located in La Grange, KY, within the Louisville, KY-IN HUD Metro FMR Area, serves as a strong cash-flow anchor for any Section 8 portfolio strategy. This classification is based on the significant spread between the Fair Market Rent (FMR) and the market rent. For fiscal year 2024, the FMR for ZIP 40031 is set at $1310, while the average market rent stands at $2,096. This means that properties in this area can generate a substantial difference in rental income when compared to the government-subsidized rates, enhancing the overall cash flow of a landlord's portfolio.
Beyond the immediate cash flow benefits, the median home value in ZIP 40031 is $386,847, which indicates a relatively stable housing market. The low price-cut share of 0.2% suggests that property values are holding steady, and the 56-day Days on Market (DOM) for rentals points to a competitive but not oversaturated market. These factors combined ensure that properties in this ZIP code will likely maintain their value and continue to provide consistent cash flow.
ZIP 40031 also has a median income of $98,513 and a renter share of 18.0%, making it a desirable location for a diversified portfolio. However, the primary role of this ZIP code should be seen as a cash-flow anchor due to the favorable spread between FMR and market rents. While the other metrics contribute positively to the overall investment appeal, the ability to leverage higher market rents against the subsidized rates is the most compelling reason for inclusion in a Section 8-focused strategy.
In conclusion, ZIP 40031 offers a solid foundation for cash flow within a Section 8 portfolio. Landlords and small-portfolio investors can expect to benefit from the $786 monthly difference between the FMR and market rent, ensuring that this area remains a reliable source of income despite the challenges of managing Section 8 properties.
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.