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 | $860 |
| 1 Bedroom | $930 |
| 2 Bedrooms | $1,120 |
| 3 Bedrooms | $1,430 |
| 4 Bedrooms | $1,640 |
| 5 Bedrooms | $1,902 |
| 6 Bedrooms | $2,130 |
| 7 Bedrooms | $2,300 |
| 8 Bedrooms | $2,415 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,120 | $230,208 | 0.49% | F |
| 3BR | $1,430 | $310,513 | 0.46% | F |
| 4BR | $1,640 | $430,635 | 0.38% | F |
U.S. Census Bureau data (2024)
The Section 8 thesis in ZIP code 47136, which encompasses Lanesville, IN, is centered around the discrepancy between the Fair Market Rent (FMR) and the actual market rent. For fiscal year 2024, the FMR is set at $1190, whereas the Census ACS reports the market rent at $965. This creates a gap of $225, or approximately 23%, where landlords can potentially benefit from higher rental income through the Section 8 voucher program.
The higher FMR compared to the market rent makes this area a prime yield play for landlords who choose to accept voucher tenants. With an FMR that exceeds the local market rate, landlords can charge closer to the government-subsidized amount without significantly deterring potential tenants. The subsidy ensures that voucher holders can afford the higher rent, thus providing landlords with a financial advantage over charging the standard market rate.
Lanesville, IN has a relatively low percentage of renters at just 6.7%, indicating that homeownership is prevalent. However, the median home value of $338,372 and median income of $91,333 suggest that there is a segment of the population that might struggle to afford homeownership or even the average market rent. Therefore, the Section 8 program acts as a critical support mechanism for these individuals, allowing them to secure housing at a subsidized rate.
Landlords should be aware of the administrative aspects involved in accepting Section 8 tenants, such as the application process and compliance requirements. Nonetheless, the financial incentive of bridging the $225 gap between FMR and market rent makes it a compelling option for those looking to optimize their investment returns in Lanesville, IN.
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.