Location: Franklin County, 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 | $1,030 |
| 1 Bedroom | $1,070 |
| 2 Bedrooms | $1,170 |
| 3 Bedrooms | $1,450 |
| 4 Bedrooms | $1,540 |
| 5 Bedrooms | $1,786 |
| 6 Bedrooms | $2,000 |
| 7 Bedrooms | $2,160 |
| 8 Bedrooms | $2,268 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,450 | $284,550 | 0.51% | F |
U.S. Census Bureau data (2024)
A skeptical investor considering real estate investments in ZIP code 37380 might raise several valid concerns. Let's address these with the data at hand.
Objection 1: Will Fair Market Rent (FMR) of $1040 for ZIP 37380 cover the mortgage on a home priced at $227,001?
The FMR of $1040 in ZIP 37380 is designed to ensure that rental income can support a property's value, but it does not guarantee coverage of the mortgage on a $227,001 home. Mortgage payments depend on various factors including interest rates, loan terms, and down payment size. However, if we assume a typical 30-year fixed-rate mortgage with an interest rate around 4.5%, the monthly payment on a $227,001 home would be approximately $1,100 without property taxes and insurance. This exceeds the FMR, suggesting that additional income sources or lower mortgage costs through higher down payments or better financing terms will be necessary to make the investment viable.
Objection 2: Is there enough renter demand at 28.8%?
The rental demand at 28.8% in ZIP 37380 indicates that nearly a third of households are renters, which is a significant portion. However, this percentage alone does not fully capture the potential rental market. To understand the demand better, we would need to analyze the vacancy rate, population growth trends, and employment stability in the area. The 28.8% figure suggests a substantial base of tenants, but it does not provide a complete picture of the rental market's health. Investors should look into these additional metrics to gauge the actual demand.
Objection 3: Will vouchers keep pace with market rents of $889?
Vouchers are intended to help low-income families afford housing, but their adequacy in covering market rents of $889 in ZIP 37380 depends on the voucher program's funding and adjustments. According to recent data, the average voucher amount has been increasing to meet rising rents, but whether it will consistently match the $889 market rent is uncertain without specific updates on voucher adjustments for the area. Landlords accepting vouchers should be aware that while they provide a steady stream of income, the exact amount may fluctuate and might not always cover the full market rent.
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.