Section 8 Fair Market Rent (FMR) for ZIP 38001 - 2027

FY 2027 Fair Market Rent Rates

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

A skeptical investor looking into ZIP 38001 might have several concerns regarding the feasibility of investing in properties for Section 8 tenants. Let's address these concerns with the available data.

• Will FMR $880 (zip FY 2024) cover the mortgage on a $178,546 home? The Fair Market Rent (FMR) for ZIP 38001 in fiscal year 2024 is set at $880. This figure represents the average rent that can be charged for a standard unit in the area. However, the ability of this amount to cover the mortgage on a home valued at $178,546 depends on the interest rate and loan terms. Assuming a 30-year fixed-rate mortgage at an average rate of 5%, the monthly payment on a $178,546 home would be approximately $950. Therefore, the FMR of $880 would not fully cover the mortgage payment. Investors would need to consider additional sources of income or lower the purchase price to align better with the rental income.
• Is there enough renter demand at 31.7%? The percentage of renters in ZIP 38001 stands at 31.7%. This indicates that slightly over a third of the households in the area are renting, which suggests a moderate level of demand. While this may seem low compared to some urban areas, it is important to note that rental demand also depends on factors such as population growth, job availability, and housing affordability. The 31.7% figure does not provide a complete picture of the rental market dynamics, but it does indicate that there is a substantial number of potential renters who could be interested in Section 8 properties. To get a clearer understanding, further research into local demographics and economic trends is recommended.
• Will vouchers keep pace with $777 market rents? The current market rent in ZIP 38001 is $777. Given that the FMR is $880, landlords participating in the Section 8 program should receive sufficient voucher payments to cover their costs. However, the question of whether vouchers will keep pace with future increases in market rents is more complex. Voucher amounts are typically adjusted annually based on HUD's calculations of regional rental market conditions. If the market rents in ZIP 38001 remain stable or increase slowly, vouchers should continue to provide adequate coverage. But if market rents rise significantly faster than the adjustment rate, landlords may face financial pressures. It's crucial for investors to monitor both the FMR and actual market rent trends to ensure long-term viability.

The data provides a foundation for understanding the rental market in ZIP 38001, but it is essential to conduct thorough due diligence before making investment decisions. This includes evaluating the specific property, its location, and the broader economic context.

Data Sources: FMR data from HUD (2027). 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.