Location: Grainger County, TN | Metro: Knoxville, TN HUD Metro FMR Area
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 | $920 |
| 1 Bedroom | $920 |
| 2 Bedrooms | $1,160 |
| 3 Bedrooms | $1,450 |
| 4 Bedrooms | $1,660 |
| 5 Bedrooms | $1,926 |
| 6 Bedrooms | $2,157 |
| 7 Bedrooms | $2,330 |
| 8 Bedrooms | $2,447 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,450 | $309,359 | 0.47% | F |
U.S. Census Bureau data (2024)
The economics of Section 8 housing in ZIP code 37779 are governed by the SAFMR (Small Area Fair Market Rent) for a two-bedroom apartment, which is set at $1050 per month for fiscal year 2024. This SAFMR rate is specifically tailored for this ZIP code, reflecting the local rental market conditions more accurately than broader regional averages.
In contrast, the local market rent for a two-bedroom unit, based on Census ACS data, stands at $889 per month. This indicates that the SAFMR rate is higher than the average market rent, providing a potential financial benefit to landlords who participate in the Section 8 program.
A landlord should understand that the voucher payment does not cover the entire rent amount. Tenants are required to contribute a portion of their income towards the rent, typically 30% of their adjusted monthly income. For example, if a tenant's monthly income is $2000, they would need to pay $600 towards the rent. The remaining balance, up to the SAFMR limit, is then covered by the housing authority.
In addition to the base rent, there are utility allowances that can be factored into the total compensation. These allowances vary but are designed to help cover the costs of utilities such as electricity, gas, water, and sewer. For ZIP 37779, the utility allowance is calculated separately and added to the rent subsidy. However, the exact amount depends on the specific circumstances and the housing authority's policies.
To illustrate, let’s assume the utility allowance for a two-bedroom apartment in ZIP 37779 is $200 per month. If a tenant contributes $600, the housing authority would pay the difference between the tenant's contribution plus the utility allowance and the SAFMR rate. In this case, the housing authority would reimburse the landlord $450 ($1050 - $600), and the utility allowance of $200 would be paid directly to the tenant or landlord, depending on the arrangement.
This results in a total reimbursement of $650 ($450 + $200) per month from the housing authority, plus the $600 from the tenant, making a total of $1250. Since the SAFMR rate is $1050, the landlord receives an additional $200 beyond the SAFMR, creating a surplus for the landlord.
In summary, landlords in ZIP 37779 participating in the Section 8 program for a two-bedroom apartment can expect a reimbursement that includes both the rent subsidy and utility allowances, potentially leading to a surplus above the SAFMR rate of $1050.
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.