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 | $830 |
| 1 Bedroom | $900 |
| 2 Bedrooms | $1,090 |
| 3 Bedrooms | $1,390 |
| 4 Bedrooms | $1,600 |
| 5 Bedrooms | $1,856 |
| 6 Bedrooms | $2,079 |
| 7 Bedrooms | $2,245 |
| 8 Bedrooms | $2,357 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $900 | $100,039 | 0.9% | C |
| 2BR | $1,090 | $140,277 | 0.78% | D |
| 3BR | $1,390 | $160,872 | 0.86% | C |
| 4BR | $1,600 | $216,796 | 0.74% | D |
| 5BR | $1,856 | $452,084 | 0.41% | F |
U.S. Census Bureau data (2024)
The classification of ZIP code 40208 in Louisville, KY, hinges on analyzing its yield and stability metrics. The Fair Market Rent (FMR) for the area in fiscal year 2024 is set at $1,210. This compares favorably to the local market rent of $1,128, indicating a potential for slightly above-average rental yields. The median home value in the area is $140,937, which is relatively low compared to national averages, suggesting that property acquisition costs could be manageable.
Evaluating stability, the area has a significant percentage of renters at 73.8%, which is a positive indicator for landlords looking for a steady tenant pool. However, the lack of data on days on market (DOM) suggests some uncertainty regarding how quickly properties can be rented out once they become vacant. Additionally, the median household income is $39,560, which is below the national average and may affect tenants' ability to pay higher rents consistently.
Based on these figures, ZIP 40208 leans towards being a steady-cashflow zone. The above-market FMR supports decent rental yields, while the high percentage of renters indicates a stable demand for rentals. Despite the lower median income, the manageable home values and above-average FMR suggest that landlords can maintain steady cash flows if they manage their properties effectively and keep rents reasonable.
To further clarify, here's a breakdown:
In conclusion, ZIP 40208 presents itself as a reliable investment option for those seeking steady cash flow rather than high-risk, high-reward flips. The combination of slightly above-average rental rates and a strong renter base makes it suitable for long-term investments.
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.