Section 8 Fair Market Rent (FMR) for ZIP 38017 - 2027

Investment Score for ZIP 38017

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	$1,400
1 Bedroom	$1,520
2 Bedrooms	$1,660
3 Bedrooms	$2,190
4 Bedrooms	$2,530
5 Bedrooms	$2,935
6 Bedrooms	$3,287
7 Bedrooms	$3,550
8 Bedrooms	$3,728

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	$1,660	$318,034	0.52%	F
3BR	$2,190	$366,211	0.6%	F
4BR	$2,530	$520,564	0.49%	F
5BR	$2,935	$669,507	0.44%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 38017 (Collierville, TN) #### Introduction Collierville, TN, located in Shelby County, is a suburban area known for its high quality of life and strong economic indicators. The ZIP code 38017 has a population of 56,826 residents, with a median household income of $138,677. This analysis will focus on the dynamics of Section 8 vouchers, affordability for renters, and the potential for investors interested in properties that cater to Section 8 tenants. #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 38017, as of 2026, is set at: - 0BR: $1370 - 1BR: $1500 - 2BR: $1650 (which is 14.3% of the median income) - 3BR: $2180 - 4BR: $2540 These FMRs represent the maximum amount that a Section 8 voucher holder can pay for rent. However, the actual rental market in Collierville tends to be significantly higher. For instance, the Zillow median price for a 2BR property is $318,923, which translates to a monthly mortgage payment well above the FMR. The price-to-FMR ratio for a 2BR property is 16.1x, indicating that the actual rental prices are far beyond what a typical Section 8 voucher can cover. This discrepancy creates significant constraints for voucher holders. They must find units that do not exceed the FMR, which can be challenging given the high cost of living in Collierville. Additionally, landlords who accept Section 8 vouchers often face stringent regulations and inspections, which can deter some from participating in the program. #### Affordability & Renter Profile Collierville has a relatively low percentage of renters at 21.6%, suggesting that it is primarily a homeownership-driven community. The occupancy rate of 95.6% indicates a tight rental market, where demand consistently outstrips supply. Given the high median household income, most renters likely have stable employment and can afford market-rate rents, making them less reliant on Section 8 vouchers. The high median income also implies that those who do rent are likely to be paying a substantial portion of their income towards housing. With the 2BR FMR being only 14.3% of the median income, it becomes clear that the rental market is not particularly affordable for lower-income households. This tight market and high income levels suggest that the majority of renters are middle to upper-middle class individuals who can afford market rates without assistance. #### Investor Angle From an investor perspective, the key question is whether properties can generate positive cash flow at the FMR levels. Given the high median home values and rental prices, it is unlikely that a property rented at the FMR would yield positive cash flow. For example, a 2BR unit renting at $1650 per month would struggle to cover the mortgage, property taxes, insurance, maintenance, and other costs associated with owning a property in Collierville. To illustrate, let’s consider a 2BR property valued at $318,923. Assuming a 30-year fixed-rate mortgage at 5%, the monthly mortgage payment would be approximately $1670. Adding in property taxes (estimated at 1.5% of the property value), insurance, and maintenance costs, the total expenses could easily exceed $2000 per month. This means that renting at the FMR of $1650 would result in a negative cash flow scenario. Given these factors, the investment grade for Section 8-focused properties in Collierville would be low. The market is too competitive and expensive for properties to be profitable when rented at FMR levels. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Since the FMR for smaller units (0BR and 1BR) is lower, investors might consider focusing on developing or purchasing smaller units. A 0BR unit renting at $1370 or a 1BR unit renting at $1500 might be more feasible in terms of covering operational costs, although still challenging due to the overall high cost of living. 2. **Seek Out-of-Market Opportunities**: Given the tight rental market and high costs, investors might want to look for opportunities outside of Collierville where the rental market is more affordable and the FMR can better support positive cash flow. Areas with similar demographics but lower median incomes might offer better returns. 3. **Consider Alternative Rental Assistance Programs**: While Section 8 vouchers are limited by the FMR, there may be alternative rental assistance programs that provide higher subsidies. Exploring these options could help bridge the gap between FMR and market rates, making investment in Collierville more viable. #### Bottom Line Based on the provided data, the recommendation for Section 8-focused investors in ZIP code 38017 is to **skip** this market. The high median income, tight rental market, and significant gap between FMR and actual rental prices make it difficult to achieve positive cash flow. Investors should consider areas with lower median incomes and more affordable rental markets to maximize their returns. --- This analysis provides a detailed overview of the rental market dynamics in Collierville, TN, specifically addressing the challenges faced by Section 8 voucher holders and potential investors. The conclusion is based solely on the data provided and reflects the realities of the current market conditions.

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.