Section 8 Fair Market Rent (FMR) for ZIP 37922 - 2027

Investment Score for ZIP 37922

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	$1,660
1 Bedroom	$1,670
2 Bedrooms	$2,090
3 Bedrooms	$2,610
4 Bedrooms	$3,010
5 Bedrooms	$3,492
6 Bedrooms	$3,911
7 Bedrooms	$4,224
8 Bedrooms	$4,435

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
2BR	$2,090	$302,020	0.69%	D
3BR	$2,610	$490,364	0.53%	F
4BR	$3,010	$696,652	0.43%	F
5BR	$3,492	$969,466	0.36%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 37922 (Knoxville, TN) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 37922 is set by HUD for 2026. For a two-bedroom unit, the FMR is $2,090. However, the Zillow median price for a two-bedroom home in this area is significantly higher at $303,085. This stark difference indicates that the actual rental market is much more expensive than the FMR. Specifically, the price-to-FMR ratio is 12.1x, meaning that the median price of a two-bedroom home is 12.1 times the FMR. This discrepancy creates significant constraints for voucher holders. The FMR is intended to reflect the average rent for a modest apartment in a given area, but it is clear that the actual rents far exceed this amount. As a result, tenants with Section 8 vouchers may struggle to find units that accept their vouchers, especially since landlords can choose whether to participate in the program. Given the high cost of living and the relatively low FMR, landlords who do accept vouchers may be limited in their ability to charge higher rents, which could impact their profitability. #### Affordability & Renter Profile ZIP code 37922 has a median household income of $132,807, which is quite high compared to national averages. Despite this, only 15.5% of the population are renters, indicating that homeownership is prevalent in this area. The occupancy rate is also high at 94.8%, suggesting that there is little vacancy and that the market is relatively tight. Given the high median income and the fact that only 18.9% of median income is required to afford a two-bedroom unit at FMR, it might seem that renting should be affordable. However, the reality is that the actual rental costs are much higher than the FMR, making it difficult for many renters to find affordable housing. Additionally, the high cost of homes suggests that the typical renter in this area is likely to be someone who cannot afford to buy due to financial constraints or other reasons, such as students or young professionals. #### Investor Angle From an investor perspective, the key question is whether properties can generate positive cash flow at the FMR levels. The FMR for a two-bedroom unit is $2,090, while the Zillow median price is $303,085. To determine if this is cash-flow positive, we need to consider the typical expenses associated with owning and renting out a property. These include mortgage payments, property taxes, insurance, maintenance, and other operating costs. Assuming a 30-year fixed-rate mortgage at an interest rate of 5%, the monthly mortgage payment on a $303,085 home would be approximately $1,640. Adding in property taxes (assuming 1.5% of the home value), insurance (around $100 per month), and maintenance (typically 1% of the home value annually, or about $250 per month), the total monthly expenses would be around $2,000. This means that even at the FMR level of $2,090, the cash flow would be minimal, and any unexpected expenses could quickly erode profitability. Furthermore, the investment grade in this ZIP code is likely to be low due to the tight rental market and the high cost of homes relative to the FMR. Investors may find it challenging to compete with the actual rental market prices, and they may have difficulty finding tenants willing to pay the FMR. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high cost of two-bedroom units, investors might want to focus on smaller units like one-bedroom apartments. The FMR for a one-bedroom unit is $1,680, which is still below the actual rental market price but closer to the Zillow median price for smaller units. This could provide a better opportunity for positive cash flow. 2. **Consider Multi-Family Properties**: Single-family homes are expensive, but multi-family properties might offer a more balanced approach. If an investor can acquire a multi-family property where the average rent per unit is closer to the FMR, they might achieve a more stable cash flow. For example, a four-unit building with each unit renting at $1,680 would generate $6,720 in monthly rental income, potentially covering the higher mortgage payments and other expenses. 3. **Negotiate with Landlords**: Since the actual rental market is so much higher than the FMR, investors might need to negotiate with landlords to accept lower rents. This could involve offering incentives like guaranteed occupancy or long-term leases to make the deal more attractive. #### Bottom Line Based on the data provided, the recommendation for Section 8-focused investors in ZIP code 37922 is to **skip** this market. The high cost of homes and the tight rental market make it challenging to find properties that can generate positive cash flow at the FMR levels. Additionally, the high median income and low percentage of renters suggest that the demand for affordable housing is limited, and the competition from non-voucher tenants is fierce. Investors looking to enter this market should carefully consider the potential risks and challenges before proceeding.

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.