Location: Sevier 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 | $1,290 |
| 1 Bedroom | $1,300 |
| 2 Bedrooms | $1,540 |
| 3 Bedrooms | $1,980 |
| 4 Bedrooms | $2,080 |
| 5 Bedrooms | $2,413 |
| 6 Bedrooms | $2,703 |
| 7 Bedrooms | $2,919 |
| 8 Bedrooms | $3,065 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,540 | $297,751 | 0.52% | F |
| 3BR | $1,980 | $393,129 | 0.5% | F |
| 4BR | $2,080 | $486,185 | 0.43% | F |
U.S. Census Bureau data (2024)
A skeptical investor looking at ZIP 37865, Seymour, Tennessee, might raise several concerns regarding the feasibility of investing in the area through the lens of Section 8 housing. Let's delve into these concerns and address them with the available data.
Objection 1: Will Fair Market Rent (FMR) of $1210 (for ZIP 37865 in fiscal year 2024) cover the mortgage on a $373,949 home?
The Fair Market Rent (FMR) of $1210 does not directly cover the mortgage on a $373,949 home. To clarify, FMR is the amount set by HUD for a specific area that covers the average rent for a standard unit. It does not factor in the purchase price of a property. The mortgage payment on a $373,949 home will depend on the interest rate, down payment, and loan term. However, it is important to note that the cost of living and property values in ZIP 37865 are generally lower than in many urban areas, which can make homeownership more affordable despite the FMR figure.
Objection 2: Is there enough renter demand at 17.5%?
The percentage of renters in ZIP 37865 being 17.5% suggests a moderate level of demand for rental properties. While this may seem low compared to some urban areas, it still represents a significant portion of the population. Moreover, the demand for affordable housing, particularly in rural areas, often remains steady. The key here is understanding the local market dynamics and whether there are other factors, such as job availability or population growth trends, that could influence the rental demand.
Objection 3: Will vouchers keep pace with $1,598 market rents?
The market rent of $1,598 is notably higher than the FMR of $1210, indicating a potential gap between what vouchers cover and the actual rent charged. Vouchers are adjusted annually based on changes in the FMR and other economic indicators, but they do not always align with the market rent. This means that landlords might need to consider the possibility of accepting lower rents if they wish to participate in the Section 8 program. Alternatively, they could explore ways to increase their tenant pool beyond just voucher holders to mitigate this risk.
In conclusion, while the data presents challenges such as the disparity between FMR and market rents, it also highlights opportunities in ZIP 37865. Understanding the nuances of the local rental market and the broader economic context can help investors make informed decisions.
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.