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 | $1,030 |
| 1 Bedroom | $1,120 |
| 2 Bedrooms | $1,350 |
| 3 Bedrooms | $1,720 |
| 4 Bedrooms | $1,980 |
| 5 Bedrooms | $2,297 |
| 6 Bedrooms | $2,573 |
| 7 Bedrooms | $2,779 |
| 8 Bedrooms | $2,918 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,350 | $213,736 | 0.63% | D |
| 3BR | $1,720 | $232,445 | 0.74% | D |
| 4BR | $1,980 | $281,981 | 0.7% | D |
U.S. Census Bureau data (2024)
To integrate ZIP 40272, located within the Louisville, KY, Louisville, KY-IN HUD Metro FMR Area, into a Section 8 portfolio strategy, consider it primarily as an appreciation play. This designation is supported by several key factors:
Price-Cut Share and Days on Market (DOM): The area has a low price-cut share of 0.3%, indicating that properties here maintain their listed values well, which is advantageous for long-term investment. Additionally, the median DOM of 25 days suggests a robust local market where properties sell quickly, reducing holding costs and improving liquidity.
Cash Flow Analysis: While the Federal Market Rent (FMR) for ZIP 40272 in fiscal year 2024 is set at $1480, the current market rent is lower at $1352. This indicates a slight negative spread of $128 per unit, making it less attractive as a cash-flow anchor. However, this discrepancy should be considered in light of the overall economic context and potential for rent increases.
Economic Indicators: With a median income of $69,940, there's a solid base of economic stability supporting the housing market. This level of income can sustain higher rents over time, especially if the local economy continues to grow, making the initial negative spread a short-term concern rather than a long-term risk.
Rental Market Dynamics: The renter share of 23.9% suggests a moderate demand for rental properties, balancing between being too saturated and too sparse. This balance supports the idea of appreciation, as the rental market isn't overly competitive, allowing for gradual rent hikes and property value increases.
In conclusion, ZIP 40272 is best positioned as an appreciation play within a Section 8 portfolio. Its stable economic foundation, quick sales pace, and modest rental market competition make it a promising area for long-term growth and value appreciation, despite the initial negative spread in rental income.
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.