Location: Chattanooga, TN | Metro: Chattanooga, TN-GA MSA
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 | $900 |
| 1 Bedroom | $920 |
| 2 Bedrooms | $1,060 |
| 3 Bedrooms | $1,370 |
| 4 Bedrooms | $1,620 |
| 5 Bedrooms | $1,879 |
| 6 Bedrooms | $2,104 |
| 7 Bedrooms | $2,272 |
| 8 Bedrooms | $2,386 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,370 | $386,980 | 0.35% | F |
U.S. Census Bureau data (2024)
ZIP 30738, located within the Chattanooga, TN-GA MSA metro area, offers a strategic fit for a Section 8 portfolio due to its characteristics as a cash-flow anchor. The Federal Market Rent (FMR) for FY 2024 in this ZIP code is set at $1440, which significantly exceeds the average market rent of $689. This spread indicates that landlords can expect higher rental income compared to the local market rate, making it an attractive option for generating steady cash flow.
The median home value in ZIP 30738 stands at $277,752. Despite this relatively high home value, the FMR provides a substantial cushion for landlords participating in the Section 8 program. The difference between the FMR and the market rent suggests that landlords can maintain their investment properties without facing financial strain from below-market rents.
While appreciation plays and diversifiers also have their merits in a real estate portfolio, ZIP 30738 lacks the necessary conditions to be considered either. There is no available data on price-cut shares or days on market (DOM), which would typically indicate potential for property value appreciation. Additionally, the 12.6% renter share and median income of $66,080 do not provide enough diversity in terms of income levels or ownership structures to serve as a significant diversifier.
In conclusion, ZIP 30738 is best suited as a cash-flow anchor within a Section 8 portfolio strategy. Landlords can rely on the higher FMR to ensure consistent and above-average rental income, which is crucial for maintaining profitability and covering operational costs in a regulated rental environment.
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.