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 | $940 |
| 1 Bedroom | $1,020 |
| 2 Bedrooms | $1,230 |
| 3 Bedrooms | $1,570 |
| 4 Bedrooms | $1,810 |
| 5 Bedrooms | $2,100 |
| 6 Bedrooms | $2,352 |
| 7 Bedrooms | $2,540 |
| 8 Bedrooms | $2,667 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,230 | $212,704 | 0.58% | F |
| 3BR | $1,570 | $244,678 | 0.64% | D |
| 4BR | $1,810 | $268,387 | 0.67% | D |
U.S. Census Bureau data (2024)
The rental landscape in ZIP 40219, located in Louisville, KY, presents a clear picture of affordability challenges for renters. The median income stands at $55,720, while the market rate for rent is $1,470 per month, known as the ZORI (Zillow Observed Rent Index). This market rate represents a significant portion of the average household's income, making it difficult for many residents to find affordable housing.
In comparison, the federal government's Fair Market Rent (FMR) for the area, which is set at $1,170 for zip code 40219 in fiscal year 2024, offers a more manageable option for those receiving housing assistance through vouchers. This means that a household with a voucher could potentially secure housing at a rate nearly $300 lower than the market rate, reducing the financial strain on their budget.
With 46.2% of the population being renters and a total population of 39,909, the competition among landlords is fierce. The affordability gap between the ZORI and the FMR highlights the struggle many tenants face, pushing them towards properties that accept vouchers. Landlords who are considering their strategy should take note of this trend, as it indicates a substantial demand for units that can accommodate lower rental rates.
The takeaway for landlords is clear: accepting Section 8 vouchers can provide a steady stream of tenants in an area where many cannot afford market-rate rents. While cash-paying tenants might offer higher immediate returns, the stability and reliability of voucher payments make them a valuable consideration. In ZIP 40219, focusing on both voucher and cash-pay strategies will be key to maintaining a competitive edge in the local rental market.
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.