Section 8 Fair Market Rent (FMR) for ZIP 37918 - 2027

Investment Score for ZIP 37918

Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)

FY 2027 Fair Market Rent Rates

Unit Size	Monthly FMR
Studio	$1,160
1 Bedroom	$1,170
2 Bedrooms	$1,460
3 Bedrooms	$1,830
4 Bedrooms	$2,100
5 Bedrooms	$2,436
6 Bedrooms	$2,728
7 Bedrooms	$2,946
8 Bedrooms	$3,093

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
1BR	$1,170	$177,197	0.66%	D
2BR	$1,460	$254,791	0.57%	F
3BR	$1,830	$337,003	0.54%	F
4BR	$2,100	$440,216	0.48%	F
5BR	$2,436	$538,174	0.45%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 37918 (Knoxville, TN) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 37918, as of 2026, is set at $1440 for a two-bedroom unit, which represents approximately 24.8% of the median household income of $69,752. This indicates that the FMR is well below the median income, making it feasible for many residents to afford housing with the assistance of Section 8 vouchers. However, the actual rental prices in the area can be significantly higher, leading to potential constraints for voucher holders. According to the Zillow median price for a two-bedroom unit, the average selling price is $252,777. The price-to-FMR ratio is 14.6x, meaning that the typical cost of purchasing a property is much higher than the rent it could generate under the FMR guidelines. This suggests that landlords might find it challenging to cover their mortgage payments and other expenses solely through FMR-based rental income. #### Affordability & Renter Profile In ZIP code 37918, 31.0% of the population are renters, indicating a significant demand for rental properties. With a total population of 45,971, this translates to roughly 14,241 renters. The occupancy rate stands at 92.7%, suggesting that the market is relatively tight, with most available units being occupied. Given that the FMR for a two-bedroom unit is only $1440, while the median household income is $69,752, the majority of renters in this area likely have some form of financial assistance, such as Section 8 vouchers, to help cover their rent. This implies that the rental market is heavily dependent on government subsidies to maintain affordability for low-income residents. #### Investor Angle From an investor perspective, the key question is whether the FMR can support positive cash flow. Given the high price-to-FMR ratio of 14.6x, it is unlikely that an investor would achieve positive cash flow purely based on FMR rents without additional sources of income or significant economies of scale. To determine the investment grade, we need to consider several factors including the cost of acquisition, operating expenses, and potential vacancy rates. The median purchase price of $252,777 for a two-bedroom unit suggests that the initial capital outlay would be substantial. If we assume an average annual operating expense of around 50% of the gross rental income, the effective rental income would be even lower. For example, if a landlord were to rent a two-bedroom unit at the FMR of $1440 per month, the annual rental income would be $17,280. Assuming a 50% operating expense ratio, the net rental income would be $8,640 annually. This amount is far less than the potential mortgage payment on a property priced at $252,777, especially considering interest rates and other costs. #### Specific Actionable Insights 1. **Target Properties Below Median Price**: Investors should focus on acquiring properties that are priced below the median of $252,777. For instance, targeting a property priced at $200,000 could potentially reduce the mortgage burden and improve cash flow when renting at FMR rates. 2. **Consider Multi-Family Units**: Given the high price-to-FMR ratio, single-family homes may not be financially viable. Instead, multi-family units could provide better returns due to economies of scale and the ability to spread fixed costs across multiple units. 3. **Engage with Local Housing Authorities**: To maximize the chances of securing tenants with Section 8 vouchers, investors should establish strong relationships with local housing authorities. This can ensure a steady stream of qualified tenants and reduce the risk of vacancies. #### Bottom Line For investors focused on Section 8 properties in ZIP code 37918, the recommendation is to **skip** this market unless they can acquire properties at significantly discounted prices or are willing to manage multi-family units. The high price-to-FMR ratio and the tight rental market make it difficult to achieve positive cash flow purely through rental income at FMR levels. Therefore, unless there are strategic advantages or unique opportunities, investing in this ZIP code is not recommended for those primarily interested in Section 8 properties.

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.