Section 8 Fair Market Rent (FMR) for ZIP 40269 - 2027

FY 2027 Fair Market Rent Rates

The economics of Section 8 in ZIP 40269, located in Louisville, Kentucky, are straightforward. The SAFMR (Small Area Fair Market Rent) for a two-bedroom apartment in this specific ZIP code for fiscal year 2024 is set at $1320. This figure represents the maximum amount that the housing authority will pay towards rent for a two-bedroom unit in this area.

To understand how this impacts a landlord, let's break down the components of a voucher payment. A tenant participating in the Section 8 program typically pays 30% of their adjusted income towards rent. The housing authority then covers the difference between the tenant's contribution and the SAFMR, up to the limit of $1320. Additionally, there are utility allowances which vary but are usually around $300-$400 per month, depending on the household size and local energy costs.

If we assume a conservative utility allowance of $350, the total reimbursement a landlord might receive for a two-bedroom unit would be $1670 ($1320 for rent plus $350 for utilities). However, the actual amount paid by the housing authority can be less if the tenant's share plus the utility allowance exceeds $1320.

In ZIP 40269, the local market rent is currently unavailable, which means landlords need to rely on the SAFMR to determine if they can afford to accept Section 8 tenants. Given the SAFMR of $1320, landlords should consider this when setting their rental rates.

Let's illustrate with an example. If a landlord sets the rent at $1400 for a two-bedroom unit, the housing authority will only reimburse up to $1320. In this case, the landlord would have a reimbursement gap of $80 per month. Conversely, if the landlord sets the rent at $1200, they would receive the full $1200 from the housing authority plus the utility allowance, resulting in a surplus of $170 per month.

In summary, landlords in ZIP 40269 should carefully consider the SAFMR of $1320 when pricing their units for Section 8 tenants. They must balance their rental income expectations against the potential reimbursement gap or surplus, ensuring that their properties remain financially viable while providing affordable housing options.

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.