Section 8 Fair Market Rent (FMR) for ZIP 37707 - 2027

FY 2027 Fair Market Rent Rates

The analysis of the Section 8 cap-rate scenario for ZIP code 37707 in Tennessee is limited due to the lack of specific data points such as market rent, median home value, renter density, and days on market (DOM). However, we can still provide an overview based on the Fair Market Rent (FMR) for a 2-bedroom apartment, which is set at $930 annually for fiscal year 2026.

The implied gross yield when using the Section 8 FMR can be calculated if we assume that the annual rental income for a property is equivalent to the FMR. For ZIP 37707, the annual rental income would be $930 per unit. Without a specific median home value, it's impossible to calculate an exact cap rate, but we can infer that properties in this area would have a relatively low gross yield compared to typical market yields.

In a more typical market scenario where the market rent is available, the gross yield would be higher. The difference between the FMR and market rent often reflects the premium that landlords can charge for non-subsidized tenants. Given the absence of market rent data, we cannot provide a direct comparison. However, it's generally understood that market rents tend to be higher than FMRs, leading to a better gross yield for landlords who do not participate in the Section 8 program.

The lack of detailed information such as renter density and DOM makes it challenging to assess the overall market conditions and the feasibility of relying solely on Section 8 tenants. Typically, a higher renter density and shorter DOM indicate a stronger rental market, which could support higher market rents and thus better gross yields for landlords.

While the exact cap rate cannot be determined without additional data, the implication is clear: participating in the Section 8 program for ZIP 37707 would likely result in a lower gross yield compared to renting at market rates. Landlords should consider these factors carefully when deciding whether to enroll in the Section 8 program or seek market-rate tenants.

Data Sources: FMR data from HUD (2027).

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.