Location: Muhlenberg County, KY | Metro: Muhlenberg County, KY
| Unit Size | Monthly FMR |
|---|---|
| Studio | $650 |
| 1 Bedroom | $690 |
| 2 Bedrooms | $910 |
| 3 Bedrooms | $1,080 |
| 4 Bedrooms | $1,220 |
| 5 Bedrooms | $1,415 |
| 6 Bedrooms | $1,585 |
| 7 Bedrooms | $1,712 |
| 8 Bedrooms | $1,798 |
U.S. Census Bureau data (2024)
To understand how Section 8 economics work in ZIP 42374, it's crucial to break down the components involved in the rental subsidy process. The Section 8 program uses the SAFMR (Small Area Fair Market Rent) to determine the maximum amount of rent assistance it will pay for a given unit. For a two-bedroom apartment in ZIP 42374, the SAFMR for fiscal year 2026 is set at $870. This figure represents the maximum monthly rent that the government will cover for eligible tenants.
The SAFMR is specifically tailored to reflect the local housing market conditions, ensuring that the subsidy is relevant to the area's cost of living. However, it's important to note that the local market rent for ZIP 42374 is currently not available. Despite this, landlords can still rely on the SAFMR as a benchmark for setting their rents within the Section 8 program.
A landlord participating in the Section 8 program receives a voucher payment from the Housing Authority. This payment is calculated based on the SAFMR and the tenant's ability to pay. Typically, the tenant is required to contribute 30% of their adjusted income towards rent. If the tenant's contribution plus the utility allowances does not meet the full SAFMR amount, the difference is made up by the voucher payment. For example, if a tenant's portion is $261 and the utility allowance is $100, the total voucher payment would be $509 to make up the $870 SAFMR.
The utility allowance is a fixed amount added to the tenant's contribution to cover basic utilities such as electricity, water, and gas. This allowance varies but is typically around $100 for a two-bedroom unit. Therefore, if the tenant's portion is $261 and the utility allowance is $100, the landlord would receive a total of $870 per month.
In ZIP 42374, the typical reimbursement gap or surplus for a two-bedroom voucher is determined by comparing the SAFMR to the actual rent charged. Given the SAFMR of $870 and the lack of specific local market rent data, we can assume that if the actual rent is higher than $870, there will be a reimbursement gap. Conversely, if the actual rent is lower than $870, the landlord would benefit from a surplus.
To illustrate, if a landlord charges $950 for a two-bedroom apartment, they would have a reimbursement gap of $80 ($950 - $870) that the tenant must cover. On the other hand, if the landlord charges $750, they would receive a surplus of $120 ($870 - $750).
Landlords should consider these economic factors when deciding whether to participate in the Section 8 program. It's essential to balance the guaranteed rental income with the potential reimbursement gap or surplus to ensure financial stability and profitability.
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.