Location: Nashville-Davidson--Murfreesboro--Franklin, TN | Metro: Nashville-Davidson--Murfreesboro--Franklin, TN 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 | $1,410 |
| 1 Bedroom | $1,470 |
| 2 Bedrooms | $1,600 |
| 3 Bedrooms | $2,050 |
| 4 Bedrooms | $2,490 |
| 5 Bedrooms | $2,888 |
| 6 Bedrooms | $3,235 |
| 7 Bedrooms | $3,494 |
| 8 Bedrooms | $3,669 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,600 | $313,723 | 0.51% | F |
| 3BR | $2,050 | $379,907 | 0.54% | F |
| 4BR | $2,490 | $518,181 | 0.48% | F |
U.S. Census Bureau data (2024)
A skeptical investor considering Section 8 properties in ZIP code 37189, Nashville, TN, might have several concerns. Let's address them with the available data.
Objection 1: Will FMR $1460 (zip FY 2024) cover the mortgage on a $402,670 home?
The Fair Market Rent (FMR) for ZIP 37189 in fiscal year 2024 is set at $1460. This figure represents the maximum amount that the Housing Choice Voucher program will pay for a rental unit. To determine if this covers the mortgage on a $402,670 home, we need to consider the typical interest rates and loan terms. Assuming a 30-year fixed-rate mortgage at an average rate of 5%, the monthly payment on a $402,670 home would be approximately $2,134. At first glance, the FMR does not cover the mortgage, leaving a shortfall of around $674 per month. However, this calculation does not include potential down payments or any appreciation in property value over time. Additionally, it's important to note that the FMR is intended to cover only the rent portion, not the entire cost of homeownership.
Objection 2: Is there enough renter demand at 23.1%?
The percentage of renters in ZIP 37189 is 23.1%. This figure indicates the proportion of households that are renting rather than owning their homes. While 23.1% might seem low, it's crucial to understand the context. The demand for rental housing can vary significantly based on factors such as job availability, population growth, and local economic conditions. In Nashville, the overall rental market is robust, and even a lower percentage of renters can still translate into a significant number of potential tenants. Moreover, the Section 8 program specifically targets low-income individuals who might otherwise struggle to find affordable housing, creating a dedicated niche market.
Objection 3: Will vouchers keep pace with $1,367 market rents?
The average market rent in ZIP 37189 is $1,367. Given that the FMR is $1460, it appears that the voucher amounts are sufficient to cover the majority of market rents. However, the key concern here is whether these voucher amounts will adjust to keep up with inflation and rising rents. Historically, the voucher program has been adjusted annually to reflect changes in the cost of living, but the adjustments do not always match the pace of rent increases. Therefore, while the current FMR is adequate, future adjustments are uncertain and could potentially lead to a gap between voucher amounts and market rents.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.