Location: Knoxville, 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 | $1,100 |
| 1 Bedroom | $1,100 |
| 2 Bedrooms | $1,380 |
| 3 Bedrooms | $1,730 |
| 4 Bedrooms | $1,990 |
| 5 Bedrooms | $2,308 |
| 6 Bedrooms | $2,585 |
| 7 Bedrooms | $2,792 |
| 8 Bedrooms | $2,932 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,380 | $303,432 | 0.45% | F |
| 3BR | $1,730 | $413,664 | 0.42% | F |
| 4BR | $1,990 | $561,309 | 0.35% | F |
| 5BR | $2,308 | $746,676 | 0.31% | F |
U.S. Census Bureau data (2024)
A skeptical investor considering real estate investments in ZIP 37803 (Maryville, TN) might have several valid concerns. Here we address these concerns using the available data.
Objection 1: Will FMR $1180 (zip FY 2024) cover the mortgage on a $410,354 home?
The Fair Market Rent (FMR) for ZIP 37803 is set at $1180 for fiscal year 2024. This figure represents the average rent that can be expected for a standard two-bedroom apartment. To determine if this will cover the mortgage on a $410,354 home, we need to calculate the monthly mortgage payment. Assuming a 30-year fixed-rate mortgage at an interest rate of 4%, the monthly mortgage payment would be approximately $1975. At first glance, the FMR does not cover the mortgage payment. However, it's important to note that the FMR is specifically for subsidized housing and does not necessarily reflect the broader rental market. Landlords can charge higher rents, which should exceed the FMR to ensure profitability.
Objection 2: Is there enough renter demand at 17.8%?
The percentage of renter-occupied households in ZIP 37803 is 17.8%. While this may seem low compared to other areas, it still translates into a significant number of potential renters. The demand for rental properties in Maryville, TN, is steady and supported by the local economy, which includes a mix of industries such as manufacturing, healthcare, and education. The presence of Maryville College also contributes to a consistent student population seeking rentals. Although the 17.8% figure indicates a lower proportion of renters, it does not mean that there isn't sufficient demand to fill vacancies.
Objection 3: Will vouchers keep pace with $2,048 market rents?
The average market rent for a two-bedroom apartment in ZIP 37803 is $2,048. In contrast, the voucher amount is pegged at the FMR level of $1180. This discrepancy suggests that landlords relying solely on vouchers would likely struggle to cover their costs, including mortgage payments and property maintenance. Vouchers are designed to support those with lower incomes, and the gap between the voucher amount and the actual market rent is significant. It's advisable for landlords to consider a mix of both voucher-supported and market-rate tenants to balance their income streams effectively.
In conclusion, while the data raises some concerns regarding the coverage of mortgage payments by FMR, the adequacy of renter demand, and the ability of vouchers to meet market rents, these challenges can be navigated through strategic planning and diversification of tenant types. The key is to understand the local market dynamics and adapt investment strategies accordingly.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.