Section 8 Fair Market Rent (FMR) for ZIP 37116 - 2027

FY 2027 Fair Market Rent Rates

In ZIP code 37116, which falls under the Nashville-Davidson--Murfreesboro--Franklin County area in Tennessee, understanding how Section 8 economics work can help landlords make informed decisions about participating in the program. For fiscal year 2024, the Section 8 Area Fair Market Rent (SAFMR) for a two-bedroom apartment in this specific ZIP code is set at $1650. This SAFMR figure is crucial because it directly influences the maximum amount that the Housing Choice Voucher program will pay toward a tenant's rent.

The SAFMR is not the only factor in determining the actual payment a landlord receives. Tenants using vouchers are required to contribute a portion of their income towards the rent. Typically, this contribution is 30% of the household's adjusted monthly income. Additionally, there are utility allowances that vary based on the size of the unit and the specific area. For a two-bedroom apartment, the utility allowance in ZIP 37116 is set at $300.

To walk through an example, let’s assume a tenant’s portion of the rent is $495, based on a household income of $1650 per month (30%). The total reimbursement a landlord would receive for a two-bedroom apartment would be the sum of the tenant’s contribution and the utility allowance, plus the voucher payment up to the SAFMR limit. If the total rent charged is $1650, then the landlord would receive the full SAFMR amount plus the utility allowance, totaling $1950.

However, if the market rent for a two-bedroom in this area exceeds the SAFMR, the landlord will not receive the difference. For instance, if the market rent is $2000, the landlord would still only receive up to the SAFMR limit of $1650, plus the $300 utility allowance, making the total reimbursement $1950. This leaves a gap of $50 between the market rent and the reimbursement, meaning the landlord would lose $50 per month on this unit.

If the market rent is lower than the SAFMR, the landlord might see a surplus. For example, if the market rent is $1500, the landlord would receive the full market rent plus the utility allowance, totaling $1800. In this case, the landlord benefits from the higher reimbursement rate compared to the market rent, resulting in a surplus of $300.

Given the SAFMR for ZIP 37116 is $1650, landlords should compare this against their own rental rates. If they charge more than $1650 for a two-bedroom, they will face a reimbursement gap. Conversely, if they charge less, they will benefit from a surplus. Understanding these dynamics is key to deciding whether participating in the Section 8 program is financially viable for your property portfolio.

Data Sources: FMR data from HUD (2027).

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.