Location: Nashville-Davidson--Murfreesboro--Franklin, TN | Metro: Nashville-Davidson--Murfreesboro--Franklin, TN HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,810 |
| 1 Bedroom | $1,880 |
| 2 Bedrooms | $2,050 |
| 3 Bedrooms | $2,630 |
| 4 Bedrooms | $3,190 |
| 5 Bedrooms | $3,700 |
| 6 Bedrooms | $4,144 |
| 7 Bedrooms | $4,476 |
| 8 Bedrooms | $4,700 |
U.S. Census Bureau data (2024)
A decision tree for whether to invest in ZIP 37214 (Nashville, TN) for Section 8 properties begins with three key questions.
1. Does the Fair Market Rent (FMR) of $1850 cover the debt service on a property valued at $366,900?
Yes: The FMR of $1850 can indeed cover the debt service on a property costing $366,900. Assuming an average mortgage rate of around 5%, the annual debt service would be approximately $18,345 or $1,529 per month. This is comfortably below the FMR threshold.
No: This scenario does not apply since the FMR exceeds the required debt service coverage.
It Depends: This scenario does not apply since the FMR clearly covers the debt service based on typical financing conditions.
2. How does the Zillow Observed Rent Index (ZORI) of $1,555 compare to the FMR?
ZORI Above FMR: This scenario does not apply as the ZORI is below the FMR.
ZORI At or Below FMR: The ZORI of $1,555 is below the FMR of $1850. This indicates that the market rent is lower than what Section 8 will pay, making the area attractive for Section 8 tenants. Landlords can potentially benefit from higher rental income compared to the market rate.
3. Is there sufficient demand with 37.5% of residents being renters and an average Days on Market (DOM) of 47 days?
Yes: With 37.5% of residents renting and an average DOM of 47 days, there is a healthy level of demand. A DOM under 60 days typically signifies a competitive rental market where properties are rented quickly. This suggests that there are enough potential tenants, including those eligible for Section 8, to fill vacancies promptly.
No: This scenario does not apply as the DOM of 47 days indicates a robust rental market.
It Depends: This scenario does not apply since the DOM is sufficiently low to indicate strong demand.
In conclusion, ZIP 37214 presents a favorable environment for Section 8 investments. The FMR exceeds the necessary debt service coverage, the ZORI is below the FMR, and there is a strong rental demand with a relatively short DOM period. These factors collectively suggest that landlords should consider purchasing properties in this ZIP code for Section 8 participation.
Data Sources: FMR data from HUD (2027). 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.