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 | $850 |
| 1 Bedroom | $920 |
| 2 Bedrooms | $1,110 |
| 3 Bedrooms | $1,420 |
| 4 Bedrooms | $1,630 |
| 5 Bedrooms | $1,891 |
| 6 Bedrooms | $2,118 |
| 7 Bedrooms | $2,287 |
| 8 Bedrooms | $2,401 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $920 | $65,239 | 1.41% | A |
| 2BR | $1,110 | $85,547 | 1.3% | A |
| 3BR | $1,420 | $122,395 | 1.16% | B |
| 4BR | $1,630 | $134,464 | 1.21% | A |
| 5BR | $1,891 | $143,395 | 1.32% | A |
U.S. Census Bureau data (2024)
The economics of Section 8 in ZIP code 40211, located in Louisville, KY, and part of Jefferson County, are straightforward. For a two-bedroom apartment, the SAFMR (Small Area Fair Market Rent) is set at $1180 for fiscal year 2024. This SAFMR is specific to this ZIP code, reflecting the localized rental market conditions.
In contrast, the local market rent for a similar unit, as indicated by ZORI (Zillow Observed Rent Index), stands at $1,216. This suggests that landlords in ZIP 40211 might face a slight challenge in covering their market rents exclusively through Section 8 vouchers.
A landlord participating in the Section 8 program should understand that the total rent is split between the voucher payment and the tenant's contribution. Typically, the tenant pays 30% of their adjusted income towards rent, which can vary based on individual circumstances. However, there is also a minimum rent requirement, usually around $50, ensuring that even tenants with very low incomes contribute something.
Beyond the base rent, utility allowances can be factored into the overall compensation. These allowances are designed to help cover the cost of utilities and can vary depending on the size of the unit and local rates. For a two-bedroom apartment, the utility allowance might add an additional $200 to the monthly reimbursement, though exact amounts depend on the specifics of the voucher and local regulations.
To illustrate, if a tenant's portion is $300 (this figure includes both the 30% of income and any applicable minimum rent), and the utility allowance is $200, the total reimbursement a landlord would receive from the voucher program would be $1180 (SAFMR) + $200 (utility allowance) - $300 (tenant's portion) = $1080 per month.
This means that in ZIP 40211, where the market rent is $1,216, a landlord would have a reimbursement gap of $136 per month for a two-bedroom unit. This gap represents the difference between what the market demands and what the Section 8 program provides, leaving landlords to either accept lower returns or seek additional non-voucher tenants to balance their portfolios.
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.