Location: Haywood County, TN | Metro: Memphis, TN-MS-AR HUD Metro FMR Area
Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)
| Unit Size | Monthly FMR |
|---|---|
| Studio | $960 |
| 1 Bedroom | $1,040 |
| 2 Bedrooms | $1,140 |
| 3 Bedrooms | $1,500 |
| 4 Bedrooms | $1,740 |
| 5 Bedrooms | $2,018 |
| 6 Bedrooms | $2,260 |
| 7 Bedrooms | $2,441 |
| 8 Bedrooms | $2,563 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,500 | $231,178 | 0.65% | D |
U.S. Census Bureau data (2024)
The ZIP code 38049 is situated in a predominantly suburban setting within the broader Memphis area. With a total population of 3,957, it stands out as a relatively small community where 33.2% of residents are renters. The median household income in this ZIP is $59,500, indicating a middle-class neighborhood. The median home value is $235,276, which suggests that homeownership is accessible but not without a significant investment.
Moving into the realm of rental economics, the Fair Market Rent (FMR) for ZIP 38049 in fiscal year 2024 is set at $1,060. This figure, established by HUD for Section 8 purposes, reflects the government's assessment of reasonable rental costs in the area. In contrast, the actual market rent, according to the Census Bureau’s American Community Survey (ACS), is $887. This discrepancy between the FMR and the market rent presents an opportunity for landlords and small-portfolio investors.
The difference between the FMR and the market rent means that landlords participating in the Section 8 program can expect higher rental income compared to the local market rates. This scenario is particularly favorable for hands-off voucher operators who seek stable, government-backed rental income. However, for those interested in a hands-on approach, there is potential to add value to properties through renovations or strategic location improvements, thereby increasing their market appeal beyond the baseline set by the FMR.
In conclusion, ZIP 38049 offers a balanced environment for both hands-off and hands-on investors. For those looking to capitalize on the guaranteed income from the Section 8 program, this ZIP provides a clear advantage with its higher FMR compared to the actual market rate. Meanwhile, for value-add buyers, the existing gap between the FMR and market rent signals opportunities to enhance property values and rents through active management and improvement efforts.
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.