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 | $1,040 |
| 1 Bedroom | $1,140 |
| 2 Bedrooms | $1,380 |
| 3 Bedrooms | $1,780 |
| 4 Bedrooms | $2,060 |
| 5 Bedrooms | $2,390 |
| 6 Bedrooms | $2,677 |
| 7 Bedrooms | $2,891 |
| 8 Bedrooms | $3,036 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,380 | $206,087 | 0.67% | D |
| 3BR | $1,780 | $273,548 | 0.65% | D |
| 4BR | $2,060 | $332,843 | 0.62% | D |
U.S. Census Bureau data (2024)
The economics of Section 8 in ZIP 47161, which covers Palmyra, IN, in Harrison County, are driven by the Specific Area Fair Market Rent (SAFMR) for a two-bedroom apartment, set at $1610 for fiscal year 2024. This SAFMR is specifically tailored for this ZIP code, reflecting the unique rental market conditions of the area. However, it's important to note that the local market rent for a two-bedroom unit, according to Census ACS data, is significantly lower at $856.
A Section 8 voucher holder will typically pay 30% of their adjusted income towards rent, plus a utility allowance. For simplicity, let's assume an average adjusted income of $1500 per month, leading to a tenant contribution of $450 (30% of $1500). Utility allowances vary but can be estimated around $100 for electricity and $50 for gas, totaling $150.
This means that the total reimbursement a landlord would receive from a voucher holder for a two-bedroom unit is $600 ($450 tenant contribution + $150 utility allowance). Given the SAFMR of $1610, the landlord could theoretically charge up to this amount, but the actual reimbursement would only cover part of it. If the landlord charges the maximum SAFMR rate, the reimbursement gap would be $1010 ($1610 - $600).
However, since the local market rent is $856, if a landlord sets the rent at this level, the reimbursement gap would be much smaller at $206 ($856 - $600). This makes the difference between charging the market rate versus the maximum allowable rate under Section 8 quite significant. Landlords should consider these figures carefully when deciding on rental pricing for properties participating in the program.
In conclusion, landlords in ZIP 47161 must navigate the disparity between the SAFMR and the local market rent to determine their optimal rental strategy. While the SAFMR allows for higher rents, the actual reimbursement from Section 8 vouchers leaves a substantial gap unless the landlord sets the rent closer to the local market rate of $856. This results in a typical reimbursement gap of $206 for a two-bedroom unit when renting at the local market price, or a much larger gap of $1010 if renting at the maximum SAFMR rate.
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.