Section 8 Fair Market Rent (FMR) for ZIP 37207 - 2027

Investment Score for ZIP 37207

Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)

FY 2027 Fair Market Rent Rates

Unit Size	Monthly FMR
Studio	$1,320
1 Bedroom	$1,380
2 Bedrooms	$1,500
3 Bedrooms	$1,930
4 Bedrooms	$2,340
5 Bedrooms	$2,714
6 Bedrooms	$3,040
7 Bedrooms	$3,283
8 Bedrooms	$3,447

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
2BR	$1,500	$323,376	0.46%	F
3BR	$1,930	$356,807	0.54%	F
4BR	$2,340	$464,848	0.5%	F
5BR	$2,714	$500,415	0.54%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 37207 (Nashville, TN) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) figures for ZIP code 37207 in Nashville, TN, indicate that a two-bedroom apartment should rent for $1450 per month according to HUD guidelines for 2026. However, the Zillow median price for a two-bedroom home is significantly higher at $320,142, which translates to a monthly rental cost of approximately $1778 based on a 4% cap rate (a common benchmark for rental properties). This means that the actual rents in the area are about 18.4 times the FMR, suggesting that the FMR is far below the market rates. For Section 8 voucher holders, this presents a significant constraint. The maximum allowable rent for a two-bedroom unit under the voucher program is $1450, which is only 82% of the Zillow median rental price. This implies that voucher holders will struggle to find suitable housing within their budget, especially considering the high occupancy rate of 91.6%, indicating a tight rental market. #### Affordability & Renter Profile ZIP code 37207 has a population of 41,366, with 44.3% of residents being renters. The median household income is $61,744, and the FMR for a two-bedroom unit represents 28.2% of this income. This suggests that while the rent is relatively affordable compared to the median income, it still leaves a considerable portion of the income allocated towards housing costs, particularly for those relying on Section 8 vouchers. Given the high occupancy rate and the fact that 44.3% of the population are renters, it is clear that the market is tight. The demand for rental units exceeds the supply, making it difficult for low-income individuals to find affordable housing options. The disparity between the FMR and the actual rental prices indicates that there is a significant gap in the affordability of housing for voucher recipients. #### Investor Angle From an investor perspective, the ZIP code 37207 offers a potentially lucrative opportunity due to the high demand and limited supply of rental units. However, the cash flow potential at FMR levels must be carefully evaluated. At the FMR of $1450 for a two-bedroom unit, the property would need to be priced around $174,000 to generate a 4% cap rate, which is far below the Zillow median price of $320,142. Therefore, properties purchased at market value would likely yield a negative cash flow if rented strictly at FMR levels. The investment grade can be assessed by looking at the price-to-FMR ratio. A ratio of 18.4x indicates that the market is highly inflated relative to the FMR, which could pose challenges for investors seeking to maximize returns through rental income alone. However, the strong demand for rental units and the high occupancy rate suggest that there is a robust market for rental properties, even if they are not strictly Section 8 compliant. #### Specific Actionable Insights 1. **Focus on Properties Below Market Value**: Investors should seek out properties that are priced below the Zillow median but still above the FMR. For instance, a two-bedroom property priced at $250,000 would yield a monthly rental income of $1000 based on a 4% cap rate, which is still above the FMR of $1450. This would allow for positive cash flow while still being accessible to voucher holders. 2. **Consider Renovation Projects**: Given the high price-to-FMR ratio, there may be opportunities to purchase older, less desirable properties at lower prices and renovate them to command higher rents. For example, a property priced at $200,000 could be renovated to increase its value and appeal, allowing for a rental price closer to the Zillow median. 3. **Diversify Property Types**: While the FMR for a two-bedroom unit is $1450, the Zillow median price suggests that the actual rental market is much higher. Investors might consider diversifying into different property types, such as one-bedroom or three-bedroom units, where the FMR is $1320 and $1850 respectively. This would provide a broader range of rental options and potentially better cash flow. #### Bottom Line For Section 8-focused investors, the recommendation is to **Skip** this ZIP code unless they can find properties significantly below market value. The high price-to-FMR ratio and the tight rental market make it challenging to achieve positive cash flow while remaining within the bounds of the Section 8 program. However, for general investors looking to capitalize on the strong rental demand, **Hold** or **Buy** recommendations could be considered, depending on the ability to secure properties at favorable prices and the willingness to manage a portfolio that may not be exclusively Section 8 compliant.

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.