Location: Harlan County, KY | Metro: Harlan County, KY
| Unit Size | Monthly FMR |
|---|---|
| Studio | $700 |
| 1 Bedroom | $800 |
| 2 Bedrooms | $950 |
| 3 Bedrooms | $1,230 |
| 4 Bedrooms | $1,300 |
| 5 Bedrooms | $1,508 |
| 6 Bedrooms | $1,689 |
| 7 Bedrooms | $1,824 |
| 8 Bedrooms | $1,915 |
U.S. Census Bureau data (2024)
The economics of Section 8 housing in ZIP code 40863 are straightforward. The SAFMR (Standard Area Fair Market Rent) for a two-bedroom apartment is set at $910 per month for fiscal year 2026. This figure is specific to this ZIP code and reflects the rental assistance payment standard established by HUD (Department of Housing and Urban Development).
Local market rents are currently unavailable, which makes it challenging to directly compare the SAFMR with the actual rents being charged in the area. However, landlords should understand that the SAFMR serves as the upper limit for what a Section 8 voucher can cover. If the market rent exceeds $910, the landlord will need to accept the lower reimbursement rate or seek higher rents from non-voucher tenants.
A voucher holder is required to pay 30% of their adjusted monthly income toward rent. In ZIP 40863, if the adjusted monthly income is $1,500, the tenant would contribute $450 towards the rent. The remaining amount up to the SAFMR of $910 is covered by the Section 8 program. This means the government would reimburse the landlord $460 ($910 - $450).
In addition to covering part of the rent, the Section 8 program also includes utility allowances. These allowances vary but typically add an additional $100 to $200 to the reimbursement amount, depending on the specific utilities included in the tenant's lease agreement. Therefore, the total reimbursement might range from $560 to $660 per month for a two-bedroom unit.
The reimbursement gap or surplus depends on the actual market rent compared to the SAFMR. Since local market rents are not available, we cannot calculate the exact gap or surplus. However, if the market rent is less than $910, landlords will receive the full market rent plus any applicable utility allowance, resulting in a surplus. Conversely, if the market rent exceeds $910, landlords will face a gap between the market rent and the reimbursement from the Section 8 program.
To illustrate, assume a market rent of $1,000 for a two-bedroom unit. The landlord would receive $560 to $660 from the Section 8 program, creating a gap of $340 to $440 that would need to be covered either by the tenant or the landlord. If the market rent is below $910, say $850, then there would be a surplus of $60 to $160 after accounting for the tenant’s contribution and utility allowance.
Landlords must carefully consider these economic factors when deciding whether to participate in the Section 8 program. The SAFMR sets a clear cap on reimbursement, and the actual market conditions will determine whether participating in the program leads to a surplus or a shortfall in rental income.
Data Sources: FMR data from HUD (2027). 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.