Section 8 Fair Market Rent (FMR) for ZIP 40299 - 2027

Investment Score for ZIP 40299

Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)

FY 2027 Fair Market Rent Rates

Unit Size	Monthly FMR
Studio	$1,120
1 Bedroom	$1,220
2 Bedrooms	$1,470
3 Bedrooms	$1,880
4 Bedrooms	$2,160
5 Bedrooms	$2,506
6 Bedrooms	$2,807
7 Bedrooms	$3,032
8 Bedrooms	$3,184

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
2BR	$1,470	$279,424	0.53%	F
3BR	$1,880	$339,581	0.55%	F
4BR	$2,160	$431,909	0.5%	F
5BR	$2,506	$564,841	0.44%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 40299 (Louisville, KY) #### Section 8 Voucher Dynamics In ZIP code 40299, the Fair Market Rent (FMR) for a two-bedroom apartment is set at $1470 per month. This amount represents 19.7% of the median household income in the area, which stands at $89,440. However, the actual rent prices in the market are significantly higher. The Zillow median price for a two-bedroom home is $277,887, indicating a price-to-FMR ratio of 15.8x. This means that the actual monthly rental cost for a two-bedroom unit would be much higher than the FMR, likely around $2200 based on the price-to-FMR ratio. Therefore, voucher holders face significant constraints as they may struggle to find units that accept their vouchers and fit within the FMR guidelines. #### Affordability & Renter Profile The renter population in ZIP 40299 constitutes 25.2% of the total population of 42,207 residents. With a high occupancy rate of 96.3%, it suggests that the housing market is relatively tight, with few vacancies available. Given the median household income of $89,440, the rent burden for a typical two-bedroom unit at $2200 would be approximately 29.1% of the monthly income. This is above the generally accepted affordability threshold of 30%, indicating that many renters in this area may find it challenging to afford housing without financial assistance. The FMR for a two-bedroom unit at $1470 is considerably lower than the actual market rent, making it difficult for low-income families to find affordable housing options. #### Investor Angle From an investor’s perspective, the FMR guidelines present a challenge when considering cash flow. If an investor purchases a two-bedroom property at the Zillow median price of $277,887, the monthly mortgage payment would typically be around $1200 to $1300, assuming a 30-year fixed-rate mortgage with an interest rate of 5%. However, the FMR of $1470 is below the actual market rent of approximately $2200. This means that properties rented out at the FMR would likely result in negative cash flow, especially when factoring in maintenance costs, insurance, and property taxes. The investment grade for this ZIP code would be considered low due to the mismatch between FMR and market rents, making it less attractive for investors focused solely on Section 8 vouchers. #### Specific Actionable Insights 1. **Focus on Larger Units**: Given that the FMR for larger units (3BR and 4BR) is closer to the actual market rent, investors might consider focusing on acquiring three- and four-bedroom properties. For example, the FMR for a four-bedroom unit is $2180, which is only slightly below the potential market rent. This could provide better cash flow opportunities compared to smaller units. 2. **Seek Non-Section 8 Tenants**: Due to the high price-to-FMR ratio, it might be more profitable to seek tenants who can pay market rates rather than relying solely on Section 8 vouchers. Investors should consider marketing strategies that appeal to a broader range of renters, including those who might qualify for other forms of government assistance but can afford higher rents. 3. **Consider Location-Specific Opportunities**: While the overall market in ZIP 40299 is tight, there may be pockets within the ZIP where rents are slightly lower. Conducting a detailed neighborhood-by-neighborhood analysis could reveal areas where FMR units are more readily available, providing better opportunities for positive cash flow. #### Bottom Line For investors focused on Section 8 vouchers, the recommendation for ZIP 40299 is to **skip** this market. The high price-to-FMR ratio and the tight housing market make it difficult to achieve positive cash flow. Instead, investors might want to look into other ZIP codes with more favorable FMR-to-market rent ratios or consider diversifying their tenant base to include non-Section 8 renters who can pay market rates.

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.