Section 8 Fair Market Rent (FMR) for ZIP 37901 - 2027

FY 2027 Fair Market Rent Rates

The economics of Section 8 in ZIP code 37901, located in Knoxville County, Tennessee, are straightforward. The SAFMR (Small Area Fair Market Rent) for a two-bedroom apartment in this ZIP code for fiscal year 2024 is set at $1280. This figure represents the maximum amount that a landlord can receive from the housing authority for a two-bedroom unit under the Section 8 program.

To understand how this impacts your rental income, it's important to break down the components of the voucher payment. The tenant is responsible for paying 30% of their adjusted monthly income towards rent. If we assume an average adjusted monthly income of $1500 for a tenant in this area, their portion would be $450. Additionally, there are utility allowances that vary based on the size of the unit and the region. For a two-bedroom apartment in ZIP 37901, the utility allowance might be around $200, which is added to the tenant's payment.

This means that the total reimbursement you can expect from a voucher holder for a two-bedroom apartment is the sum of the tenant's contribution and the utility allowance, which in this case would be $650 ($450 + $200).

Therefore, the housing authority will cover the remaining $630 of the SAFMR ($1280 - $650), ensuring that the total payment to you remains at the $1280 level. However, since the local market rent is currently unavailable, it's difficult to provide a direct comparison. But if the local market rent were higher than $1280, you would face a shortfall, meaning you'd receive less than what you could potentially charge in the open market. Conversely, if the local market rent were lower, you would be receiving more than the typical market rate, thus benefiting from a surplus.

In conclusion, for a two-bedroom apartment in ZIP 37901, the typical reimbursement gap or surplus depends on the current local market rent. Given the SAFMR of $1280 and assuming a tenant income of $1500, the total payment covers $1280 of the rent. Landlords should monitor local market rents to determine whether participating in the Section 8 program provides a financial advantage or disadvantage compared to renting outside the program.

Data Sources: FMR data from HUD (2027).

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.