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 | $1,100 |
| 1 Bedroom | $1,190 |
| 2 Bedrooms | $1,440 |
| 3 Bedrooms | $1,840 |
| 4 Bedrooms | $2,110 |
| 5 Bedrooms | $2,448 |
| 6 Bedrooms | $2,742 |
| 7 Bedrooms | $2,961 |
| 8 Bedrooms | $3,109 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,440 | $238,769 | 0.6% | D |
| 3BR | $1,840 | $300,607 | 0.61% | D |
| 4BR | $2,110 | $340,909 | 0.62% | D |
U.S. Census Bureau data (2024)
In ZIP code 40220 of Louisville, KY, investing in Section 8 properties presents several potential pitfalls that landlords must be aware of. Tenant turnover can be a significant issue, with the market rent at $1,363 compared to the Fair Market Rent (FMR) of $1,390 for FY 2024. This slight discrepancy might lead to frequent changes in occupancy, increasing administrative burdens and operational costs.
Vacancy exposure is another concern, especially considering the average days on market (DOM) stands at 19 days. While this figure suggests a relatively quick turnaround for finding tenants, it also indicates a competitive rental market where vacancies can occur if the property does not meet the necessary standards or is priced incorrectly.
The deferred-maintenance exposure is notable due to the typical home value of $290,848 and the median income of $78,434. These numbers suggest that while homes in the area are valued reasonably high, the median income may not cover extensive maintenance needs without careful management. Landlords should be prepared to invest in regular upkeep to ensure their properties remain attractive to Section 8 tenants.
However, these risks are tempered by the high renter share of 33.9%, which generally translates into higher demand for rental properties, including those that accept Section 8 vouchers. This demand can help mitigate the impact of tenant turnover and vacancy exposure, making the investment more stable over time.
In conclusion, the overall risk for a first-time Section 8 landlord in ZIP 40220 is moderate.
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.