Location: Knox County, KY | Metro: Knox County, KY
| Unit Size | Monthly FMR |
|---|---|
| Studio | $650 |
| 1 Bedroom | $840 |
| 2 Bedrooms | $910 |
| 3 Bedrooms | $1,180 |
| 4 Bedrooms | $1,520 |
| 5 Bedrooms | $1,763 |
| 6 Bedrooms | $1,975 |
| 7 Bedrooms | $2,133 |
| 8 Bedrooms | $2,240 |
U.S. Census Bureau data (2024)
The economics of Section 8 housing in ZIP code 40946 are defined by the SAFMR (Small Area Fair Market Rent) for a two-bedroom apartment, which is set at $870 per month for fiscal year 2026. This figure represents the maximum amount that the Housing Choice Voucher program will pay towards rent for a unit of this size in this specific ZIP code.
When a tenant uses a Section 8 voucher, they are responsible for paying approximately 30% of their adjusted income toward rent. The remainder is covered by the voucher, up to the SAFMR limit. For instance, if a tenant's monthly adjusted income is $1,000, they would pay $300 toward rent, leaving $570 to be covered by the voucher. However, since the SAFMR is $870, the landlord will receive the full $570 from the voucher program, ensuring a stable income source.
Utility allowances are also factored into the overall compensation package but do not directly affect the rental payment. These allowances are separate payments made to help cover the cost of utilities, which can vary depending on the tenant's usage and the type of unit. Landlords should be aware that while these allowances can provide additional income, they are not guaranteed and depend on the tenant's actual utility costs.
To illustrate, let’s assume the local market rent for a two-bedroom in ZIP 40946 is $1,000 per month. If the voucher holder’s share is $300, the voucher program would cover the remaining $570. Thus, the landlord would receive $870 ($300 from the tenant + $570 from the voucher), falling short of the market rent by $130. This shortfall is the reimbursement gap that landlords must consider when renting to Section 8 tenants.
In cases where the market rent is below the SAFMR, such as $750 per month, the landlord would still receive $870, creating a surplus of $120. This surplus is rare but does occur in areas where the market rent is exceptionally low compared to the SAFMR.
The typical reimbursement gap for a two-bedroom apartment in ZIP 40946 is thus $130, assuming the market rent is $1,000. Landlords must weigh this gap against the benefits of stable tenancy and reduced vacancy rates that often come with Section 8 rentals.
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.