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 | $1,030 |
| 1 Bedroom | $1,120 |
| 2 Bedrooms | $1,350 |
| 3 Bedrooms | $1,720 |
| 4 Bedrooms | $1,980 |
| 5 Bedrooms | $2,297 |
| 6 Bedrooms | $2,573 |
| 7 Bedrooms | $2,779 |
| 8 Bedrooms | $2,918 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,120 | $204,186 | 0.55% | F |
| 2BR | $1,350 | $230,692 | 0.59% | F |
| 3BR | $1,720 | $272,798 | 0.63% | D |
| 4BR | $1,980 | $298,495 | 0.66% | D |
U.S. Census Bureau data (2024)
The ZIP code 40217 in Louisville, KY, presents an interesting scenario for both renters and landlords. The median income in this area stands at $69,114, which places it in a moderate economic bracket. However, when considering the market rate for rent, which is set at $1,469 per month (ZORI), the financial strain on households becomes evident. This figure represents a significant portion of the average household's income, making it challenging for residents to find affordable housing options.
To put this into perspective, let’s examine how this compares to the federal housing voucher payment standard, known as Fair Market Rent (FMR), which is set at $1,370 for the fiscal year 2024. While this amount is slightly lower than the market rate, it still constitutes a substantial monthly expense. Given that 41.3% of the 11,663 population are renters, the affordability gap between the ZORI and the FMR highlights a competitive landscape for landlords. The difference of $99 per month might seem minor, but it can significantly impact a tenant's decision-making process, especially when considering other living expenses.
The affordability gap means that landlords will face stiff competition if they choose to rely solely on cash-paying tenants who must bear the full market rate. Many potential tenants may opt for units that accept vouchers, as they offer a more manageable monthly cost. For landlords, this translates to a strategic choice between accepting vouchers, which come with government-set rates, or focusing on cash-paying tenants who can afford the higher market rate.
The takeaway for landlords: In ZIP 40217, there is a notable preference for more affordable rental options, suggesting that landlords should consider accepting vouchers as part of their rental strategy. This approach can help attract and retain tenants in a market where many households struggle to meet the full market rate. By diversifying their tenant base to include voucher recipients, landlords can mitigate the risk of vacancies and ensure a steady stream of income, even if it means adhering to the slightly lower FMR 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.