Location: Morristown, TN | Metro: Morristown, 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 | $1,010 |
| 1 Bedroom | $1,020 |
| 2 Bedrooms | $1,290 |
| 3 Bedrooms | $1,570 |
| 4 Bedrooms | $2,060 |
| 5 Bedrooms | $2,390 |
| 6 Bedrooms | $2,677 |
| 7 Bedrooms | $2,891 |
| 8 Bedrooms | $3,036 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,570 | $316,069 | 0.5% | F |
U.S. Census Bureau data (2024)
A skeptical investor considering ZIP 37877 might raise several valid concerns regarding the feasibility of investing in properties under the Section 8 program. Here's a direct look at those objections based on the available data.
Objection 1: Will Fair Market Rent (FMR) of $1060 cover the mortgage on a $302,997 home?
The data shows that the FMR for ZIP 37877 in fiscal year 2024 is set at $1060. To determine if this will sufficiently cover the mortgage, we must consider the typical interest rates and loan terms. Assuming a 30-year fixed-rate mortgage at an average rate of 4.5%, the monthly mortgage payment for a $302,997 home would be approximately $1500. Therefore, the FMR of $1060 falls short of covering the mortgage payment. Landlords should prepare to cover the difference out-of-pocket or seek alternative financing options to make Section 8 investments viable.
Objection 2: Is there enough renter demand at 16.7%?
The rental occupancy rate of 16.7% in ZIP 37877 suggests a relatively low percentage of homes being rented out compared to owned residences. This figure does not directly indicate the number of potential renters in the area. However, it's important to note that a lower occupancy rate could mean fewer rental units overall, which might actually create a competitive advantage for landlords willing to participate in the Section 8 program. The demand for affordable housing remains strong, and the program can attract tenants who might otherwise struggle to find suitable accommodation.
Objection 3: Will vouchers keep pace with $1,020 market rents?
The market rent in ZIP 37877 is currently at $1,020, slightly above the FMR. While the FMR is a guideline for voucher amounts, local housing authorities have discretion to adjust payments based on actual market conditions. In many cases, they do increase the voucher amount to meet the higher market rents, but this is not guaranteed. Investors should expect some variance and be prepared to negotiate with the housing authority to ensure that the voucher covers the necessary rent.
In summary, while the FMR does not fully cover the mortgage payment for a $302,997 home, the Section 8 program can still be a valuable investment strategy due to the strong demand for affordable housing. The 16.7% rental occupancy rate indicates a niche market that could benefit from additional rental units. Lastly, while vouchers aim to keep pace with market rents, there is no assurance that they will cover the entire $1,020 rent; negotiation and flexibility are key.
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.