Section 8 Fair Market Rent (FMR) for ZIP 40251 - 2027

FY 2027 Fair Market Rent Rates

The economics of Section 8 housing in ZIP 40251, located in Louisville, Kentucky, revolve around the SAFMR (Small Area Fair Market Rent) for a two-bedroom apartment, which is set at $1320 per month for fiscal year 2024. This SAFMR is specifically tailored for this ZIP code, reflecting the unique rental market conditions here.

A landlord participating in the Section 8 program will receive a payment from the Housing Choice Voucher Program that covers part of the rent. The exact amount depends on the tenant's portion of the rent and any utility allowances. Typically, the tenant is responsible for paying 30% of their adjusted income towards rent, while the government covers the remaining balance up to the SAFMR limit.

To illustrate, let's assume a tenant has an adjusted monthly income of $1000. Thirty percent of this income would be $300, which the tenant would pay directly to the landlord. If the total rent for the unit is $1320, the government would then cover the difference, which is $1020, making the total reimbursement to the landlord $1320.

Utility allowances can vary but are generally capped at a certain amount. For instance, if the utility allowance is $200, it is included in the calculation of the total rent. Thus, if the tenant's share remains at $300, and the utility allowance is $200, the government would cover $820 of the total rent, bringing the reimbursement to $1020 ($300 tenant share + $200 utility allowance + $820 government share).

In ZIP 40251, since the local market rent data is currently unavailable, we cannot determine whether the SAFMR aligns with or deviates from the prevailing market rates. However, it is important to note that the SAFMR is designed to reflect the average market rent for similar units in the area, providing a benchmark for fair pricing.

The typical reimbursement gap or surplus for a two-bedroom voucher in this ZIP code would depend on the actual market rent of the property. If the market rent exceeds the SAFMR, there would be a reimbursement gap, meaning the landlord would need to accept a lower rent or find other ways to supplement the income. Conversely, if the market rent is below the SAFMR, the landlord would receive a surplus, covering the full rent and possibly some utilities.

Given the SAFMR of $1320, landlords should ensure their rents are competitive yet realistic to attract tenants while also complying with the program guidelines. This balance ensures steady occupancy and financial stability.

Data Sources: FMR data from HUD (2027).

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.