Location: Jefferson County, IN | 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 | $790 |
| 1 Bedroom | $900 |
| 2 Bedrooms | $1,090 |
| 3 Bedrooms | $1,380 |
| 4 Bedrooms | $1,710 |
| 5 Bedrooms | $1,984 |
| 6 Bedrooms | $2,222 |
| 7 Bedrooms | $2,400 |
| 8 Bedrooms | $2,520 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,090 | $162,447 | 0.67% | D |
| 3BR | $1,380 | $221,944 | 0.62% | D |
| 4BR | $1,710 | $292,476 | 0.58% | F |
U.S. Census Bureau data (2024)
In ZIP 47243, which covers Hanover, IN, and part of Jefferson County, the Section 8 economics can be analyzed using the SAFMR (Small Area Fair Market Rent) data provided. For a two-bedroom apartment in this ZIP code, the SAFMR for fiscal year 2024 is set at $1280. This means the rental assistance payment standard for this specific ZIP code is fixed at this amount, regardless of the landlord's asking price.
The local market rent, based on Census ACS data, is currently $908 for a two-bedroom unit. However, the SAFMR is higher, indicating that landlords participating in the Section 8 program can expect to receive closer to the $1280 figure, rather than the lower market rate.
A voucher holder is required to contribute a portion of their income towards rent. Typically, this is 30% of their adjusted monthly income. If we assume an average adjusted monthly income of $1000 for a voucher recipient, they would pay $300 towards rent. The remaining balance would be covered by the housing authority up to the SAFMR limit.
The voucher also includes utility allowances, which vary by location and size of the unit. In ZIP 47243, the utility allowance for a two-bedroom apartment might be around $200. This allowance is meant to help cover the cost of utilities such as electricity, water, and gas.
To illustrate, if a landlord charges $1280 for a two-bedroom unit, the voucher holder would pay $300, and the housing authority would reimburse the landlord for the difference, which is $980. However, the housing authority will only pay up to the SAFMR, so the landlord would receive the full $1280 minus the tenant's contribution of $300, resulting in a total reimbursement of $980 from the housing authority.
If the landlord charges less than the SAFMR, say $1100, the voucher holder still pays $300, and the housing authority reimburses $800, leaving the landlord with a total of $1100. In this scenario, there would be no surplus or shortfall for the landlord compared to the SAFMR, but the landlord would receive less than the maximum possible reimbursement.
The typical reimbursement gap or surplus for a two-bedroom unit in ZIP 47243, given these assumptions, is a surplus of $372. This surplus comes from the difference between the SAFMR ($1280) and the local market rent ($908), plus the utility allowance ($200). Landlords should note that while this surplus exists, it is subject to the tenant's contribution and the housing authority's reimbursement policies.
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.