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 | $1,510 |
| 1 Bedroom | $1,520 |
| 2 Bedrooms | $1,900 |
| 3 Bedrooms | $2,380 |
| 4 Bedrooms | $2,730 |
| 5 Bedrooms | $3,167 |
| 6 Bedrooms | $3,547 |
| 7 Bedrooms | $3,831 |
| 8 Bedrooms | $4,023 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,520 | $413,912 | 0.37% | F |
| 2BR | $1,900 | $690,174 | 0.28% | F |
| 3BR | $2,380 | $904,807 | 0.26% | F |
U.S. Census Bureau data (2024)
The median income in ZIP 37902, located in Knoxville, TN, stands at $50,161 per year. The market rate for rent, known as the Zillow Rent Index (ZORI), is $2,042 per month. This means that the average household would spend approximately 49% of their annual income on rent alone, which is significantly higher than the recommended guideline of 30%. For context, the Fair Market Rent (FMR) for the area, which is the standard used for voucher payments in fiscal year 2024, is set at $1,500 per month.
The disparity between the ZORI and the FMR highlights a substantial affordability gap for renters. With 81.3% of the population being renters and only 2,412 people living in the area, competition among tenants for affordable housing is fierce. Landlords who offer units at or below the FMR level are likely to attract a larger pool of potential tenants, many of whom will be relying on housing vouchers to meet their rental obligations.
The takeaway for landlords considering their strategy in ZIP 37902 is clear: focusing on voucher-receiving tenants can be a more sustainable approach given the high percentage of renters and the significant affordability gap. While cash-paying tenants might be able to afford the market rate of $2,042, they are fewer in number compared to those seeking more affordable options. By positioning themselves to accept vouchers, landlords can secure a steady stream of tenants and contribute to addressing the housing needs of the community. However, they should also be prepared to navigate the requirements and regulations associated with voucher programs, ensuring compliance while optimizing their investment returns.
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.