Location: Sevier County, TN | Metro: Sevier County, TN
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 | $1,090 |
| 1 Bedroom | $1,100 |
| 2 Bedrooms | $1,280 |
| 3 Bedrooms | $1,660 |
| 4 Bedrooms | $1,680 |
| 5 Bedrooms | $1,949 |
| 6 Bedrooms | $2,183 |
| 7 Bedrooms | $2,358 |
| 8 Bedrooms | $2,476 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,100 | $353,177 | 0.31% | F |
| 2BR | $1,280 | $433,213 | 0.3% | F |
| 3BR | $1,660 | $609,306 | 0.27% | F |
| 4BR | $1,680 | $790,661 | 0.21% | F |
| 5BR | $1,949 | $1,096,897 | 0.18% | F |
U.S. Census Bureau data (2024)
A decision tree for evaluating whether to purchase properties in ZIP 37738 (Gatlinburg, TN) for Section 8 investment can be structured around three key questions.
1) Does the Fair Market Rent (FMR) of $1,220 (for the metro area in fiscal year 2026) cover the debt service on a $414,067 property?
Yes: If the FMR of $1,220 per month is sufficient to cover the debt service on a property valued at $414,067, then this indicates that the property can be financially viable under Section 8. Debt service typically includes mortgage payments, property taxes, insurance, and maintenance costs. The FMR provides a benchmark for what tenants can be expected to pay, ensuring that the landlord can meet their financial obligations.
No: If the FMR does not cover the debt service, then purchasing a property for Section 8 in this ZIP code would not be advisable. Landlords need to ensure that the rent they receive will cover all expenses associated with owning and maintaining the property. In this case, the FMR is insufficient to support the financial burden of a $414,067 property.
2) Is the market rent of $1,133 (based on Census ACS data) above, at, or below the FMR?
Above FMR: If the market rent exceeds the FMR, this suggests that there is potential for higher rental income if the property is rented outside of the Section 8 program. However, for Section 8 investments, the focus should remain on whether the FMR covers the debt service, which has already been addressed in the first question.
At or Below FMR: If the market rent is at or below the FMR, then the Section 8 program represents the most realistic scenario for rental income. This aligns well with the first question's assessment of whether the FMR is sufficient to cover the debt service.
3) Are 32.0% of residents renters, combined with a 62-day Days on Market (DOM), indicative of enough demand for Section 8 properties?
It Depends: With 32.0% of residents being renters and an average DOM of 62 days, the demand for rental properties is moderate. A DOM of 62 days is relatively low, indicating that properties are rented out fairly quickly once listed. However, the percentage of renters is only slightly above average, suggesting that while there is demand, it might not be overwhelming. This scenario requires further analysis to determine if the local rental market can sustain a Section 8 property.
In conclusion, if the FMR of $1,220 clears the debt service on a $414,067 property, and the market rent is at or below the FMR, then the property is likely to be financially viable under the Section 8 program. The moderate level of demand indicated by the renter percentage and DOM suggests that while there is interest in rentals, careful consideration of the local market dynamics is necessary before making a final decision.
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.