Section 8 Fair Market Rent (FMR) for ZIP 38002 - 2027

Investment Score for ZIP 38002

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	$1,570
1 Bedroom	$1,700
2 Bedrooms	$1,860
3 Bedrooms	$2,460
4 Bedrooms	$2,830
5 Bedrooms	$3,283
6 Bedrooms	$3,677
7 Bedrooms	$3,971
8 Bedrooms	$4,170

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	$1,860	$182,094	1.02%	B
3BR	$2,460	$315,624	0.78%	D
4BR	$2,830	$437,995	0.65%	D
5BR	$3,283	$524,600	0.63%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 38002 (Lakeland, TN) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) figures for ZIP code 38002 in 2026 indicate that the rent for a two-bedroom unit is set at $1870. This amount represents 19.2% of the median household income in the area, which stands at $116,895. However, it is important to note that the actual rental market price for a two-bedroom unit is significantly higher, with the Zillow median price for such units being $183,043. The price-to-FMR ratio of 8.2x suggests that the actual market rents are much higher than the FMR, creating a significant constraint for voucher holders. For example, a voucher holder would find it challenging to secure a two-bedroom unit at the market rate, as they can only pay up to $1870 per month, whereas the average market price is approximately $183,043 annually, or roughly $15,253.58 per month. #### Affordability & Renter Profile Given the high median household income of $116,895, the population of 43,882, and the relatively low renter percentage of 16.4%, it is clear that Lakeland, TN, is a predominantly owner-occupied area. The occupancy rate of 97.2% indicates that the housing market is tight, with very few vacant units available. This tight market condition means that renters who do not have access to substantial financial resources or government assistance will likely struggle to find affordable housing. The FMR for a two-bedroom unit at $1870 is still a considerable expense for many households, especially when considering other living costs. #### Investor Angle From an investor perspective, the ZIP code 38002 presents a mixed scenario. The FMR for a two-bedroom unit is $1870, but the actual market rent is much higher. To determine if this ZIP code is cash-flow positive at FMR, we need to consider the typical expenses associated with property ownership, including mortgage payments, maintenance, insurance, and taxes. Given the high median home value and the tight market conditions, properties rented at FMR levels might not generate sufficient cash flow to cover these expenses, particularly for larger units like three-bedroom ($2470) and four-bedroom ($2880) units. The investment grade for this ZIP code would be considered moderate to high risk due to the disparity between FMR and actual market rents. Investors should carefully evaluate their ability to manage properties at lower-than-market rates and ensure that they can cover all associated costs while maintaining a reasonable profit margin. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Investors should focus on acquiring smaller units, such as one-bedroom ($1690) or zero-bedroom ($1560) units, where the gap between FMR and market rents is less pronounced. These units are more likely to attract Section 8 voucher holders and provide a better chance of generating positive cash flow. 2. **Evaluate Property Costs**: Before investing, conduct a thorough cost analysis to ensure that the acquisition and operational costs of a property can be covered by renting it at FMR levels. For instance, a two-bedroom unit at $1870 per month must be able to offset expenses like mortgage payments, utilities, and maintenance. 3. **Consider Location and Amenities**: Given the tight market conditions, investors should look for properties that offer unique amenities or are located in highly desirable areas within the ZIP code. This could help in attracting tenants willing to pay closer to FMR despite the higher market rates. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 38002 is to **Skip**. The significant disparity between FMR and market rents, combined with the tight market conditions and high median household income, makes it difficult to achieve positive cash flow. Additionally, the limited number of renters (only 16.4% of the population) reduces the pool of potential Section 8 voucher holders. While there may be opportunities in smaller units, the overall market dynamics suggest that this ZIP code is not ideal for Section 8 investments.

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.