Section 8 Fair Market Rent (FMR) for ZIP 37363 - 2027

Investment Score for ZIP 37363

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	$1,600
1 Bedroom	$1,670
2 Bedrooms	$1,820
3 Bedrooms	$2,250
4 Bedrooms	$2,390
5 Bedrooms	$2,772
6 Bedrooms	$3,105
7 Bedrooms	$3,353
8 Bedrooms	$3,521

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
2BR	$1,820	$324,274	0.56%	F
3BR	$2,250	$388,182	0.58%	F
4BR	$2,390	$503,350	0.47%	F
5BR	$2,772	$632,631	0.44%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 37363 (Ooltewah, TN) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) figures for Ooltewah, TN, as of 2026, are as follows: - 0BR: $1630 - 1BR: $1700 - 2BR: $1870 - 3BR: $2330 - 4BR: $2490 These FMRs represent the maximum rent that a Section 8 voucher holder can pay based on the size of their unit. However, the actual rental market in Ooltewah is significantly higher than these FMRs. For instance, the Zillow median price for a 2BR property is $316,813, which translates into a monthly mortgage payment far exceeding the FMR. The price-to-FMR ratio for a 2BR unit is 14.1x, indicating that the median home value is much higher than what the FMR suggests. This means that voucher holders face significant constraints in finding affordable housing within the limits of their vouchers. #### Affordability & Renter Profile Ooltewah has a population of 42,093, with 24.8% of residents being renters. The occupancy rate stands at 94.1%, suggesting a relatively tight rental market. Given the median household income of $97,399, the affordability of housing is a critical issue. The FMR for a 2BR unit is $1870, which represents 23.0% of the median income. This indicates that while the FMR is designed to be affordable, it still represents a substantial portion of the average resident's income. The high price-to-FMR ratio implies that there is a mismatch between the rental market and the FMR. This could mean that many units are priced beyond what voucher holders can afford, leading to a competitive environment where only those willing to pay above FMR levels can secure housing. Consequently, the rental market is likely to favor landlords who can charge higher rents, leaving voucher holders with limited options. #### Investor Angle From an investor perspective, the ZIP code 37363 presents both opportunities and challenges. The high price-to-FMR ratio suggests that properties rented at FMR levels will struggle to generate positive cash flow. For example, a 2BR unit renting at $1870 per month would have to compete with market rents that are significantly higher. The median home value of $316,813 implies a monthly mortgage payment that far exceeds the FMR, making it difficult to achieve positive cash flow without relying on non-rental income sources. The investment grade for this ZIP code would be considered low due to the tight rental market and the high cost of entry. Investors looking to focus solely on Section 8 vouchers would find it challenging to make a profit given the current FMRs and the high median home values. #### Specific Actionable Insights 1. **Target Lower-Rent Properties**: Focus on acquiring properties that can be rented at or below the FMR levels. For instance, a 1BR unit renting at $1700 might be more feasible for generating positive cash flow compared to a 2BR or larger unit. 2. **Consider Non-Voucher Tenants**: Given the high price-to-FMR ratio, consider targeting tenants who do not rely on Section 8 vouchers. These tenants might be willing to pay closer to market rates, which would be around $14.1x the FMR for a 2BR unit. This approach would help mitigate the risk of negative cash flow. 3. **Utilize Renovation Strategies**: If investing in lower-rent properties, consider renovation strategies to increase the property’s appeal and potentially command slightly higher rents within the FMR limits. This could include updating kitchens, bathrooms, and common areas to attract tenants who are just above the voucher threshold but still within the FMR range. #### Bottom Line Given the high price-to-FMR ratio and the tight rental market, the recommendation for Section 8-focused investors in ZIP code 37363 is to **Skip**. The current dynamics suggest that achieving positive cash flow purely through Section 8 rents is unlikely. Instead, investors should look towards other ZIP codes with more favorable ratios or consider diversifying their tenant base to include non-voucher holders who can pay closer to market rates.

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.