Section 8 Fair Market Rent (FMR) for ZIP 37774 - 2027

Location: Monroe County, TN | Metro: Knoxville, TN HUD Metro FMR Area

Investment Score for ZIP 37774

Monthly Rent (2BR)

$1,280

Median Price (2BR)

$272,083

1% Rule

0.47%

Annual Yield

5.65%

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	$1,020
1 Bedroom	$1,020
2 Bedrooms	$1,280
3 Bedrooms	$1,610
4 Bedrooms	$1,840
5 Bedrooms	$2,134
6 Bedrooms	$2,390
7 Bedrooms	$2,581
8 Bedrooms	$2,710

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	$1,280	$272,083	0.47%	F
3BR	$1,610	$537,255	0.3%	F
4BR	$1,840	$726,263	0.25%	F
5BR	$2,134	$911,474	0.23%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

Population

21,784

Median Household Income

$87,718

Housing Units

10,191

Renter Percentage

15.4%

Occupancy Rate

92.5%

Renter Occupied

1,456

To determine if you should buy in ZIP code 37774 (Loudon, TN) for Section 8 purposes, follow this decision tree based on the provided data:

1) Does FMR $1100 (zip FY 2024) clear debt service on a $498,790 property?

No: The Fair Market Rent (FMR) of $1100 does not clear the debt service on a property valued at $498,790. To calculate the debt service coverage ratio (DSCR), we need to know the mortgage payment. Assuming a typical mortgage rate and term, the monthly mortgage payment would be significantly higher than $1100, making it unfeasible to rely solely on Section 8 income.

2) Is market rent $2,713 (ZORI) above, at, or below FMR?

Above: The Zillow Observed Rent Index (ZORI) of $2,713 is well above the FMR of $1100. This indicates that the market rent is higher than what Section 8 pays, suggesting that landlords might prefer traditional market tenants over Section 8 participants.

3) Are 15.4% renters + 49-day DOM enough demand?

It Depends: With 15.4% of residents being renters and an average of 49 days on the market (DOM), the demand for rental properties is moderate. However, this must be weighed against the fact that the FMR is insufficient to cover the debt service on a property of this value. Additionally, the high market rent compared to the FMR suggests that landlords might face challenges in attracting and retaining Section 8 tenants.

If the FMR cannot cover the debt service, the answer is generally No. Even if the market rent is attractive, the inability to clear debt service with Section 8 alone makes the investment risky. Furthermore, the moderate demand for rentals combined with the preference for market-rate tenants due to higher rents means that relying on Section 8 alone would not be advisable.

In conclusion, for a property valued at $498,790 in ZIP 37774, the decision to invest based on Section 8 alone is No. The FMR is too low to support such a high-value property, and market conditions favor non-Section 8 tenants.

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.