Section 8 Fair Market Rent (FMR) for ZIP 40218 - 2027

Location: Louisville, KY | Metro: Louisville, KY-IN HUD Metro FMR Area

Investment Score for ZIP 40218

Monthly Rent (2BR)

$1,320

Median Price (2BR)

$150,567

1% Rule

0.88%

Annual Yield

10.52%

Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)

FY 2027 Fair Market Rent Rates

Unit Size	Monthly FMR
Studio	$1,010
1 Bedroom	$1,090
2 Bedrooms	$1,320
3 Bedrooms	$1,680
4 Bedrooms	$1,940
5 Bedrooms	$2,250
6 Bedrooms	$2,520
7 Bedrooms	$2,722
8 Bedrooms	$2,858

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
1BR	$1,090	$111,856	0.97%	C
2BR	$1,320	$150,567	0.88%	C
3BR	$1,680	$244,313	0.69%	D
4BR	$1,940	$293,491	0.66%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

Population

33,736

Median Household Income

$58,811

Housing Units

14,288

Renter Percentage

50.5%

Occupancy Rate

94.3%

Renter Occupied

6,806

The ZIP code 40218 in Louisville, KY, is a vibrant residential area that offers a mix of urban conveniences and suburban comfort. It's well-connected to the city's core, yet maintains a quiet neighborhood feel, making it attractive to both renters and homebuyers. This analysis provides key metrics to help landlords and small-portfolio investors understand the current market dynamics.

Fair Market Rent (FMR): The FMR for ZIP 40218 is set at $1280 for the fiscal year 2024, indicating the rental rate deemed fair for the government-subsidized housing program.
Market Rent: According to ZORI (Zillow Observed Rental Index), the average market rent in the area is $1,197, slightly below the FMR but still competitive.
Median Home Value: The median home value stands at $217,474, providing a benchmark for property values and potential investment returns.
Renter Share: With 50.5% of households being renters, there is a significant demand for rental properties in the area.
Days on Market (DOM): Properties typically spend 13 days on the market before being rented out, suggesting a healthy pace of transactions.
Median Income: The median household income in ZIP 40218 is $58,811, which influences the affordability and desirability of rental units.

Investors should note the close alignment between FMR and market rents, signaling a balanced market where subsidies can help fill vacancies. The high renter share and quick DOM times indicate strong demand for rental properties, while the median income level suggests that residents have the financial capacity to meet rental costs. Given these factors, investing in rental properties in ZIP 40218 could be a solid strategy for generating steady cash flow and capital appreciation.

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.