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 | $1,540 |
| 1 Bedroom | $1,610 |
| 2 Bedrooms | $1,750 |
| 3 Bedrooms | $2,160 |
| 4 Bedrooms | $2,300 |
| 5 Bedrooms | $2,668 |
| 6 Bedrooms | $2,988 |
| 7 Bedrooms | $3,227 |
| 8 Bedrooms | $3,388 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 4BR | $2,300 | $1,183,642 | 0.19% | F |
| 5BR | $2,668 | $1,624,549 | 0.16% | F |
U.S. Census Bureau data (2024)
ZIP 37350, located within the Chattanooga, TN-GA MSA metro, serves as an ideal cash-flow anchor for a Section 8 portfolio strategy. The Federal Market Rent (FMR) for FY 2024 is set at $1210, which is notably lower than the market rent of $1428. This creates a positive spread of $218 per unit, ensuring that landlords receive a consistent and reliable rental income that exceeds the government-subsidized rate.
The median home value in ZIP 37350 is $1,034,235, indicating a relatively stable housing market. However, the primary focus for a Section 8 investment should be on the rental aspect, where the guaranteed income from the government subsidy can provide a steady cash flow. This makes it particularly attractive for small-portfolio investors looking to secure long-term tenants who are less likely to default on rent payments due to the government's involvement in covering the difference between the tenant's contribution and the market rent.
While the area does not offer significant appreciation potential, as evidenced by the lack of data on price-cut shares and days on market (DOM), the strong cash flow characteristics make it a solid choice for generating regular income. The renter share of 5.5% and median income of $201,000 suggest a mixed residential area with a substantial owner-occupied component, but also a sufficient number of renters to support a Section 8 portfolio.
To summarize, ZIP 37350 is best suited as a cash-flow anchor within a Section 8 portfolio strategy. It provides a dependable income source through the positive spread between FMR and market rent, while the median home value indicates a stable housing market. Landlords and small-portfolio investors can expect a low-risk investment with steady returns, making it a valuable addition to their property holdings.
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.